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A CREATIVE SYNERGY
OF STRENGTHS
Annual report 2023
Table of contents
1. 30 years at TSX · 6
2. North American Leader —
Importer, manufacturer and
world-class distributor · 7
3. A robust network of distribution
and proximity service centres · 8
4. Financial solidity · 10
5. Soundness fostered by
two growth drivers · 12
6. Message to shareholders · 13
11. For a select and distinctive
customer experience —
A value-added multiaccess
service · 25
12. A diversified and
complementary flow of
categories — One-stop-
shop · 26
13. richelieu.com — Key component
of the value-added multiaccess
service · 27
7. Directors and Officers · 19
14. Innovation creates value · 29
8. Our values · 20
9. Over 110,000 customers
in diversified markets · 22
15. Social and environmental
responsibility · 36
Management’s report · 38
10. Architects and designers —
Financial statements · 57
A productive partnership · 24
Related notes · 61
3
Annual General Meeting of Shareholders
to be held on Thursday, April 11, 2024.
RichelieuAnnual Report 2023 The combined creativity of
our teams and our supplier
partners supports the creativity
of our customers, who are
source of inspiration as well.
A creative synergy of strengths.
4
RichelieuAnnual Report 2023 5
RichelieuAnnual Report 2023 1. 30 years at TSX
Richard Lord
New President and
CEO and shareholder
Listing on
TSX (RCH)
First distribution
centre in the U.S.
1988
1993
1999
2019
2023
Centre
1
Sales
$27 M
Centres
7
Sales
$60 M
Market
capitalization
$0.04 G
Centres
18
Sales
$165 M
Market
capitalization
$0.1 G
Centres
77
Sales
$1.0 G
Market
capitalization
$1.5 G
Centres
112
Sales
$1.8 G
Market
capitalization
$2.4 G
86 ACQUISITIONS
Value creation
6
RichelieuAnnual Report 2023 2. North American Leader —
Importer, manufacturer and
world-class distributor
Sales
$1.8 G
Customers
+110,000
Centres
Products (SKUs)
Including 3
manufacturing plants
112 *
4.8 M sq.ft.
+130,000
+50%
private labels and
exclusive products
Team
+3,000
~50%
employees
shareholders
* As at November 30, 2023
7
RichelieuAnnual Report 2023 3. A robust network of distribution
and proximity service centres
Nashville
New York (2)
Omaha
Orlando
Ozark
Philadelphia
Phoenix
Pompano
Portland ME
Portland OR
Reading (2)
Richmond
Riviera Beach
Rochester
Sarasota
Savannah
Seattle
Sioux Falls
Springfield IL
St. Louis
Syracuse
Tampa Bay
Thomasville
3 manufacturing
plants �
Les Industries Cedan inc.
Longueuil
(Veneers and
edgebanding)
Usimm Unigrav inc.
Drummondville
(Machining, 3D digitiza-
tion, unique products)
Menuiserie des Pins Ltée
Notre-Dame-des-Pins
(Decorative mouldings
and components
for the window and
door industry)
Coverage by
representatives �
50 distribution
centres in
Canada �
59 distribution
centres in the
United States �
Atlanta (2)
Birmingham
Boston
Buffalo
Burlington
Carlstadt
Charlotte
Chicago (2)
Cincinnati
Columbus
Dallas
Dania
Des Moines
Detroit
Eugene
Fort Myers
Greensboro
Greenville
Hartford
Hialeah
Hickory
Houston (2)
Indianapolis
Jacksonville
Kansas City
Lewiston
Lincoln Park
Louisville
Memphis
Minneapolis
Morristown
Anjou
Barrie
Brampton
Brantford
Burlington
Calgary (4)
Concord
Dartmouth (2)
Delta
Edmonton
Kelowna
Kitchener
Laval (2)
Longueuil (2)
Mississauga
Moncton
Montreal (3)
North York
Ottawa
Quebec (3)
Regina
Saskatoon
St-Jacques
St. John’s
Sudbury
Terrebonne
Thunder Bay
Toronto (5)
Vancouver (5)
Victoria (2)
Winnipeg
8
RichelieuAnnual Report 2023 50
centres in
Canada
3
manufacturing
plants
59
centres in the
United States
9
RichelieuAnnual Report 2023 4. Financial solidity
Sales
(in millions $)
Net earnings per share attributable
to shareholders (diluted)
(in $)
1,802.8
1,787.8
1,440.4
1,041.6
1,127.8
2.99
2.51
1.98
1.50
1.16
2019
2020
2021
2022
2023
2019
2020
2021
2022
2023
Adjusted cash flows from
operating activities1
(in millions $)
227.8
183.0
190.5
Equity attributable
to shareholders/debt
(in millions $)
666.4
551.1
498.4
904.9
817.2
121.1
98.4
2019
2020
2021
2022
2023
2019
2020
2021
2022
2023
5.7
5.8
6.4
6.0
5.3
Market capitalization
$2.4
billion
Appreciation in share price (RCH): 5,935%
Since initial stock listing
Total return on share/10 years*: 212%
$39
million
1993
10
Average annual return on
share/10 years*: 12%
* Including dividend reinvestment
2023
1. Adjusted cash flows from operating activities is a non-IFRS
measure, as indicated on page 42 of this report.
RichelieuAnnual Report 2023 Financial highlights
Years ended November 30
(in thousands of $, except per share amounts, number of shares and data expressed as a %)
Sales
EBITDA1
EBITDA margin (%)
Net earnings
Net earnings attributable to the
Shareholders of the Corporation
→ Basic per share ($)
→ Diluted per share ($)
Net margin (%)
2023
$
2022
$
2021
$
2020
$
20193
$
1,787,754
1,802,787
1,440,416
1,127,840
1,041,647
230,404
287,442
234,398
154,461
124,207
12.9
15.9
16.3
13.7
11.9
113,827
169,949
142,331
85,611
66,671
111,474
168,390
141,764
85,222
66,471
2.00
1.98
6.2
3.01
2.99
9.3
2.54
2.51
9.8
1.51
1.50
7.6
1.17
1.16
6.4
Adjusted cash flows from operating activities2
190,483
227,795
182,991
121,125
98,390
→ Diluted per share ($)
3.39
4.04
3.24
2.14
1.72
Dividends paid to the Shareholders
of the Corporation
33,521
29,083
19,374
11,284
14,424
→ Per share ($)4
0.600
0.520
0.280
0.200
0.253
Weighted average number of shares
outstanding (diluted) (in thousands)
As at November 30
Total assets
Working capital
Current ratio
Equity attributable to the
Shareholders of the Corporation
Average return on equity (%)
Book value per share ($)
Long-term debt
56,216
56,345
56,466
56,646
57,192
1,314,963
1,283,865
964,180
771,056
672,146
621,764
562,548
456,376
377,408
335,467
3.7
2.6
3.3
3.6
4.1
904,893
817,157
666,442
551,094
498,384
12.9
16.13
5,346
22.7
14.65
6,067
23.3
11.93
6,439
16.2
9.86
5,792
73,928
13.7
8.86
5,659
24,701
Cash and cash equivalents (bank overdraft)
23,710
(111,988)
58,707
1. EBITDA is a non-IFRS measure, as indicated on page 42 of this report.
2. Adjusted cash flows from operating activities and adjusted cash flows from operating activities per share are non-IFRS measures,
as indicated on page 42 of this report.
3. Those figures have been restated following the adoption of IFRS 16 on December 1, 2019.
4. The amount per share presented for 2021 excludes a special dividend paid of $0.0667 per share.
11
RichelieuAnnual Report 2023 5. Soundness fostered by
two growth drivers
➀
INNOVATIONS
IN THE PRODUCT
OFFERING
Short- and
long-term
value
creation
➁
BUSINESS
ACQUISITIONS
86 acquisitions
41 in Canada +
45 in the United States
12
RichelieuAnnual Report 2023 6. Message to shareholders
Richard Lord, President and Chief Executive Officer
The year 2023 was one of solid operational
and financial performance, marked by
achievements in line with our strategic
priorities and our optimization culture.
▹
13
RichelieuAnnual Report 2023 Message to shareholders
Regardless of economic
fluctuations and
market conditions,
our innovation and
acquisition strategies
have consistently served
the Corporation very
well, enabling us to
create value in short
and long term, and we
are extending our lead
in North America.
14
▿
We are proud of the returns from our
market penetration initiatives and business
acquisitions, which brought this year sales
to $1.8 billion, comparable to 2022 when the
renovation market was strongly impacted
during the pandemic. Also we are satisfied
with our net earnings and solid financial
position. Building on the strength of our
business model, we continued to enhance
the potential of our network with six new
acquisitions and several centre expansion
and modernization projects to seize
market growth opportunities and optimize
operations and service. Fiscal 2023 was
a dynamic productive year focused on
the customer experience, as we further
diversified our offering with a number
of innovations, and maximize the value
we bring to our customers through our
multiaccess service.
Richelieu’s last thirty years as a TSX-listed Corporation have been
marked by key milestones that have expanded and strengthened
its financial foundation, diversified its offering, markets and talents.
From an SME in 1993, supplying some 11,000 Canadian customers
through seven distribution centres, achieving sales of about
$60 million, Richelieu has steadily evolved to become a leader
in its North American market, serving over 110,000 customers
RichelieuAnnual Report 2023 Our successful
achievements over the
past thirty years show
that we have made
decisions and taken
actions at the right
time in the interest
of our four pillars of
growth: employees,
customers, suppliers
and shareholders.
Message to shareholders
The AutoStore® robotic system at the Ville Saint-Laurent,
Qc distribution centre optimizes overall warehouse
performance and space management.
through 112 centres and richelieu.com, with more than 40% of its
total sales coming from the United States. World-class innovation
and acquisitions of complementary businesses are our two
fundamental strategic drivers from which we have never deviated.
Regardless of economic fluctuations and market conditions, our
innovation and acquisition strategies have consistently served the
Corporation very well, enabling us to create value in the short and
long term, and we are extending our lead in North America.
Our financial track record reflects our culture of growth, innovation,
quality of execution and adaptability to changing situations. Our suc-
cessful achievements over the past thirty years show that we have made
decisions and taken actions at the right time in the interest of our four
pillars of growth: employees, customers, suppliers and shareholders.
We did it and continue to do so thanks to our outstanding, committed
and creative team. There are now over 3,000 of us working at Richelieu,
and everyone makes a difference. We believe in encouraging initiative,
and we make sure that everyone on our team has the best operational
tools and the support they need to succeed in their respective
responsibilities, so they can realize their professional potential while
prioritizing customer satisfaction. We ensure that our hiring programs
are competitive and inclusive at all levels of the organization.
Every day we see how our customers’ needs and purchasing habits
evolve and change. Our marketing, sales and service team, who
represents nearly 50% of Richelieu’s employees, pay close attention
to the evolving expectations of our diversified customers. What
gives Richelieu’s service its distinctive added value is primarily a
unique combination of advantages in our market: proximity and
▹
15
RichelieuAnnual Report 2023 Message to shareholders
The control and flexibility
of our supply chain,
the efficiency of each
of our interconnected
centres throughout
the network, and the
performance of our
richelieu.com site are top
priorities in meeting our
commitment to product
availability, reliability and
service excellence.
16
When architectural glass adds elegance, modernity
and brightness to commercial spaces.
▿
personalized service, market-specific approach, expert advice, ease
and reliability of purchasing operations from product selection by
the customer to “just-in-time” delivery to their business—plus our
incomparable diversified offering available in our “one-stop-shop”
centres and online, with the added flexibility offered by richelieu.com
for configuring products to specific customer needs. This advantage
synergy is efficiently supported by our supply chain, which we keep
properly equipped with the most appropriate technological tools
for our distribution activities, including performance analysis and
market targeting—while our products are sourced from several
continents and delivered coast-to-coast in North America. The
control and flexibility of our supply chain, the efficiency of each
of our interconnected centres throughout the network, and the
performance of our richelieu.com site are top priorities in meeting our
commitment to product availability, reliability and service excellence.
What attracts and seduces customers most of all is, without a
doubt, innovation in our product offering. Every year, we take the
risk of investing in innovations to inspire our customers, make their
jobs easier and support them in their goals of differentiation and
productivity. In 2023, we have introduced trend-setting innovations
in several of our categories, including storage and lighting solutions,
decorative products, eco-certified products and the very latest in
design and fittings. At our manufacturing partners who are world
leaders in their fields, creativity is supported by technological
RichelieuAnnual Report 2023 Every year, we take
the risk of investing in
innovations to inspire
our customers, make
their jobs easier and
support them in their
goals of differentiation
and productivity.
Message to shareholders
advances to continually reinvent and invent cutting-edge products.
We interact with them and with our customers to bring to the
North American market the best the world has to offer, and what
is best suited to meet the needs of our customer segments.
Our vision is to be the most diversified, innovative and complete
destination in products for manufacturers in the renovation,
construction, wardrobe, residential and office furniture, doors and
windows industries, as well as for hardware retailers and renovation
superstores. This is how we have always defined Richelieu’s vocation.
Complementing our innovation strategy, our three specialized
manufacturing plants and the business acquisitions we realize every
year also support that mission. Since 1993, we have completed
86 acquisitions in North America, expanding and enhancing our
presence in key markets, while diversifying our offering and expertise
to meet customer needs in an ever more comprehensive way, and to
accelerate growth. In 2023, the acquisitions of Unigrav, Usimm and
Quincaillerie Rabel in Quebec, followed by Trans-World Distributing
in Nova Scotia, Maverick Hardware in Oregon and Westlund
Distributing in Minnesota, were added to the 2022 acquisitions of
Compi Distributors, HGH Hardware Supply and National Builders
Hardware in the United States, and Quincaillerie Deno in Quebec.
Together, these ten transactions represent additional annual sales of
approximately $152 million, and all meet our criteria of complementarity
and diversification of products, customer bases and expertise.
While integrating these acquisitions, we made a strategic review
of our distribution centres, based on market forecasts, and set up
an expansion and consolidation program for several of them. Over
the past two years, we have invested in these projects in order to
seize growth opportunities and offer our customers optimal service.
Expansion and modernization projects have been completed in
the Atlanta, Nashville, Fort Myers, Pompano and Seattle regions.
Our brand-new Chicago centre serving the retailers market is fully
operational, as are our two new centres in the Minneapolis and
Carlstadt regions. We have also implemented our expansion project
in Calgary by refitting two centres into a single 250,000 sq. ft.
building in December 2023. We will continue to optimize the
▹
17
RichelieuAnnual Report 2023 Message to shareholders
At our manufacturing
partners who are world
leaders in their fields,
creativity is supported by
technological advances
to continually reinvent
and invent cutting-edge
products. We interact
with them and with our
customers to bring to
the North American
market the best the
world has to offer, and
what is best suited to
meet the needs of our
customer segments.
18
▿
operational performance and profitability of our network, keeping
it strong and efficient to meet the challenges of future growth.
Lastly, we continue to pay close attention to every aspect of our
environmental and social responsibility. We maintain a safe and
sustainable use of our resources, as well as a healthy and secure
working environment for our distribution centres and head office
teams. In addition, we remain committed to various projects
designed to contribute to the quality of life of the communities in
which we operate, and are proud to make concrete contributions
to both heritage conservation and youth educational initiatives.
Richelieu is firmly rooted in a strong, creative industry that keeps
innovating and growing. We serve a diversified and steadily
expanding customer base, and we are financially sound to
pursue our investments in the future. With confidence and the
support of a passionate and expert team, we will continue to
advance and prosper, relying on our growth drivers of innovation,
acquisitions and distinctive value-added service. ●
(Signed) Richard Lord
President and Chief Executive Officer
RichelieuAnnual Report 2023 Larry Lucyshyn
Vice-President, Sales to US Retailers
Éric Daignault
General Manager of Divisions
John Statton
General Manager · Western
Canada Division
Yannick Godeau
Legal Affairs and
Corporate Secretary
7. Directors and Officers
Directors
Officers
Sylvie Vachon1
Corporate Director
Richard Lord
President and Chief
Executive Officer
Quincaillerie Richelieu Ltd.
Lucie Chabot4
Corporate Director
Robert Courteau3
President
CM Management Inc.
Marie Lemay4
President
Royal Canadian Mint
Luc Martin2
Corporate Director
Pierre Pomerleau5
Executive Chairman of the Board
Pomerleau Inc.
Marc Poulin5
Corporate Director
Richard Lord
President and Chief
executive Officer
Antoine Auclair
Vice-President and
Chief Financial Officer
Guy Grenier
Vice-President, Sales and
Marketing · Industrial
Alain Charron
Vice-President · Logistics
and Supply Chain
Denis Gagnon
Vice-President ·
Information Technology
Marjolaine Plante
Vice-President · Human Resources
Jeff Crews
Vice-President, Business
Development · Retailers
Market, Canada
Craig Ratchford
Vice-President, General
Manager · United States
1. Chairwoman of the Board
2. Chairman of the Audit Committee
3. Chairman of the Human Resources and
Corporate Governance Committee
4. Member of the Audit Committee
5. Member of the Human Resources and
Corporate Governance Committee
19
RichelieuAnnual Report 2023 8. Our values
Multidisciplinary skills linked by
team spirit and a commitment
to meeting challenges with both
creativity and rigour.
Supported by cooperative
leadership and the most effective
tools for the job, all team members
are customer oriented. They share
the Corporation’s values, and take
on their respective responsibilities
with autonomy and initiative. ●
20
RichelieuAnnual Report 2023 Customer First
Innovation
Performance
Passion, commitment, discipline,
attention to detail and rigour are
the driving principles that motivate
every one of us for a “customer
first” strategic approach. We are
always on the lookout for better
ways to meet our customers’
needs. Anticipating their needs
allows us not only to support
them in their business, but even
to exceed their expectations.
Our creative approach and
innovative product offering keep
us at the cutting edge of global
trends, and allow us to offer a
unique range of innovations,
concepts and innovative solutions.
Our creativity is also reflected in
our market development strategy,
as well as in the sustained efforts
of each of us to remain innovative,
proactive and adaptable to
change and new challenges.
At Richelieu, we are proud to
make a significant contribution to
achieving outstanding performance.
Impeccable execution, ongoing
training, a strong team spirit and a
concern for costs and efficiency
are key elements in a successful
business model aimed at excellence
and high performance.
Intrapreneurship
All employees contribute to
Richelieu’s success just as if it where
their own business. We encourage
the empowerment and commitment
of all our team members towards
our organization, culture and values.
Respect, integrity
and ethics
Respect for our employees, cus-
tomers, suppliers and shareholders
means we can build lasting and
trusting relationships with our four
pillars of growth. Collaboration,
openness, transparency and
honesty are keys to the smooth
running of our organization. With
integrity, we ensure responsible
management in order to minimize
risks, comply with law and
ensure sound governance.
21
RichelieuAnnual Report 2023 9. Over 110,000 customers
in diversified markets
Boucher Guitars, Berthier-sur-Mer, at the heart of Appalachians. A team of passionate
craftsmen and luthiers who patiently and lovingly handcraft and assemble stunning-
sounding acoustic guitars. Richelieu assembly and finishing products.
Our manufacturer
customers
Our manufacturer customers bring
their expertise to a broad range of
fields. Their products are all designed
for residential, commercial and
institutional needs, whether they are
manufacturers of kitchen and bathroom
cabinets, wardrobes, storage units,
residential and office furniture, or
doors and windows. They face the
challenges common to all businesses.
22
Our commitment is to understand our
customers’ supply and manufacturing
challenges and needs, and to provide
full satisfaction with impeccable quality
and reliability of service, including a
broad range of functional and decorative
products to optimize project execution. ●
RichelieuAnnual Report 2023 Our retailer and
renovation superstore
customers
We serve many thousands of retailers
in North America, from independent
retailers under a wide range of
banners and buying groups, to
superstores and renovation centres.
We understand the challenges they are
facing in today’s fast-changing retail
environment. With diligent, reliable
service and a diversified offering
that meets the needs of the market,
we help these businesses become
destinations where their customers
can enjoy an in-store experience that
lives up to their expectations. ●
23
RichelieuAnnual Report 2023 10. Architects and designers —
A productive partnership
They advise, guide and represent
their clients in choosing the most
appropriate products and mate-
rials for their building, renovation
and fabrication projects.
Architects and designers are key
partners we are proud to keep
informed about our innovative
solutions. Our collaborations help
make their residential, institutional
and commercial projects a
success and contribute to a win-
win partnership. ●
24
RichelieuAnnual Report 2023 11. For a select and distinctive
customer experience — A value-
added multiaccess service
Listening
to customer
Understanding
and anticipating
needs
Multiaccess
service
Proximity
Customized service
richelieu.com
Distinctive
showrooms
Showrooms adjacent to
the distribution centres
Modern
Welcoming
Documented
Customer
Continuous
innovation
Catalyst for worldwide
innovations
Market
influencer
Logistics
expertise
Interconnected
distribution centres
One-stop-shop centres
Just-in-time deliveries
Automation
Sales tools
for customers
Complete set of brochures
and technical catalogs
Display systems for manu-
facturers and retailers
Website richelieu.com
25
RichelieuAnnual Report 2023 12. A diversified and complementary
flow of categories
Decorative Hardware
Screws and Fasteners
Furniture Equipment
Hinges
Slides
One-stop-shop
Opening Systems
Kitchen Solutions
Closet and Storage
Solutions
Office Solutions
Sliding System Solutions
Glass Hardware
Window and Exterior
Door Hardware
Builder’s Hardware
Veneer and Edgebanding
Surfaces and
Decorative Panels
Finishing Products
Lighting Solutions
26
RichelieuAnnual Report 2023 13. richelieu.com — Key
component of the value-added
multiaccess service
→ Comprehensive offering
→ Real-time information — photos,
→ High-performance ergonomics
videos, user instructions
→ Trilingual — French, English,
→ Complete purchasing operation
Spanish
→ Product configuration according
→ Interaction between employees,
to specific needs
customers and suppliers
Informed
decision-
making
Easier
purchasing
process
27
RichelieuAnnual Report 2023 14. Innovation creates value
As a key driver of evolution and
growth, innovation is shaping
living and working environments.
We are committed to constantly
updating our offering to include
the latest high-performance
products, designed with careful
attention. We remain true to
our mission of bringing the best
in quality, functionality and
unique stylistic appeal to our
North American markets. From
some 10,000 products in six
categories in 1993, we now offer
over 130,000 products in a host
of complementary categories,
including a number of our own-
brand and exclusive products. ●
29
RichelieuAnnual Report 2023 Innovation creates value
The latest trends in kitchen design
and fittings combine functionality and
elegance in a host of components,
including decorative surfaces and
panels, retractable storage systems
and versatile lighting.
30
RichelieuAnnual Report 2023 Innovation creates value
A wide-ranging collection of furnishing
hardware featuring finishes, materials
and designs that reflect tradition
and trends. Innovations and unique
creations by leading designers.
31
RichelieuAnnual Report 2023 Innovation creates value
Architectural glass offers many
attractive properties to designers
of residential and commercial
construction and renovation projects.
Whether for exterior balustrades,
railings or interior doors, the use of
glass requires a range of components
with proven strength and durability.
These same qualities of reliability
and resistance are required for all
the hardware components sought by
window and door manufacturers.
32
RichelieuAnnual Report 2023 Innovation creates value
Planning a closet or walk-in requires
both a sense of order and efficiency,
supported by strong knowledge
of the various storage and lighting
systems and the many functional and
decorative hardware components that
will bring elegance, cleanliness and
functionality to these living spaces.
33
RichelieuAnnual Report 2023 15. Social and environmental
responsibility
Arbre-Évolution
Le Boulot vers…
Fondation Autisme Laurentides
Richelieu is involved in a number of projects aimed
at improving the ecological diversity and quality of
life of the communities in which it operates. It takes
part in many ways in educational initiatives aimed at
the sustainable reintegration of young people into
society and the job market, as well as in heritage
conservation and community awareness projects.
36
RichelieuAnnual Report 2023 Richelieu has always been
very aware of the need for
environmental and social
responsibility. The Corporation
has long been committed to
reducing its carbon footprint
by optimizing its use of
packaging materials, employing
sound waste management
practices, establishing long-
term partnerships with its main
suppliers and carriers, as well
as the ever-increasing use of
energy-efficient equipment and
the continued diversification of
its wide range of certified eco-
friendly products.
In this regard, Richelieu is very concerned with
the safe and responsible use of all its resources,
including the protection of its employees,
the communities and the environment.
The Corporation has also set up a structure
providing its employees and consultants with a
safe and healthy work environment, exempt from
harassment, as well as various training initiatives
tailored to each of its operating centres.
Richelieu strives for fair and honest competition in all
of its business activities, as per its business policies.
All employees are therefore required to confirm they
understand and comply with the provisions of the
Corporation’s code of ethics and professional conduct.
Finally, Richelieu relies on an effective governance
structure and team. The Board of Directors and manage-
ment team make it a priority to safeguard Richelieu’s
long-term reputation as a responsible Corporation,
in compliance with its values and objectives. ●
37
RichelieuAnnual Report 2023 Management’s Report
Highlights of the year ended
November 30, 2023 · 40
Internal control over
financial reporting · 51
Presentation basis · 41
Forward-looking statements · 41
Non-IFRS measures · 42
General business overview as
at November 30, 2023 · 42
Significant accounting policies
and estimates · 51
Subsequent events · 51
New accounting policies · 51
Risk factors · 52
Main trademarks · 43
Share information · 54
Mission and strategy · 43
Outlook · 54
Network development · 43
Supplementary information · 54
Financial highlights · 44
Analysis of operating results · 45
Management’s and independant
auditor’s reports · 55
Quarterly data · 46
Fourth quarter · 47
Financial position · 48
Contractual commitments · 50
Financial instruments · 50
Consolidated financial
statements · 57
Notes to consolidated
financial statements · 61
39
RichelieuAnnual Report 2023Management’s Report Highlights
of the year ended November 2023
Richelieu’s results reflect the strength and expertise
of its team, the Corporation’s ability to stand out in its
markets through its customer service performance,
to seize growth opportunities by completing six
acquisitions in North America, and further diversify
its offering with innovative products selected from
world-leading manufacturers. Maintaining its focus on
operational and financial objectives, Richelieu pursued
its innovation, acquisition and market development
strategies with dynamism and creativity to achieve sales
in line with those of 2022, which increased by 25% in a
most favourable context resulting from the pandemic.
Despite the return to pre-pandemic levels of certain
operating expenses and the charges associated to major
network expansion projects, the Corporation reported
good net results and a solid financial position on
November 30, 2023.
Over the past two years, Richelieu has completed ten
acquisitions in North America, six of which were closed
in 2023, collectively representing additional sales
of approximately $152 million on an annual basis, in
addition to increasing its penetration in several strategic
markets in Canada and the United States. Subsequent
to fiscal 2023, two new acquisitions were realized:
Olympic Forest Products Inc., a distributor of specialized
lumber and panel products operating a distribution
centre in Erin, ON, and Rapid Start, a specialty hardware
distributor operating a distribution centre in Rittman,
OH. These two recent transactions, fully aligned with
Richelieu’s values and objectives, will add sales of
approximately $18 million on an annual basis.
In order to continue to seize market growth opportun-
ities and optimize our operations and customer service,
Richelieu has undertaken several projects over the past
two years. The Corporation also completed expansion
and modernization projects of its centres in Atlanta,
Nashville, Fort Myers, Pompano and Seattle regions. The
brand-new Chicago centre serving the retail market
is fully operational, as are the two new centres in the
Minneapolis, MN and Carlstadt, NJ regions. Furthermore,
in December 2023, the expansion project in Calgary was
completed with the refitting of two centres into a single
250,000 sq. ft. building.
Soundly positioned and building on the strengths of its
diversified market segments, Richelieu’s value-added
service concept rooted in innovation and one-stop-shop
approach, the performance of its richelieu.com website
40
and financial soundness, Richelieu will continue to drive
growth through innovation and acquisitions, with the
contribution of its expert and committed team.
→ Total sales amounted to $1.8 billion, a slight decline
of 0.8%, of which 2.6% was due to internal decrease,
partially offset by 1.8% growth from acquisitions.
→ Earnings before interest, income taxes and amortiz-
ation (EBITDA)(1) came to $230.4 million, compared
to $287.4 million for fiscal 2022, a decline of 19.8%.
EBITDA margin stood at 12.9%, compared to 15.9%
for the previous year.
→ Diluted net earnings per share declined by 33.8% to
$1.98 from $2.99 in the previous year and net earnings
attributable to shareholders amounted to $111.5 mil-
lion compared to $168.4 million last year, down 33.8%.
→ Cash flows from operating activities totalled
$270.7 million.
→ Working capital increased by 10.5% to $621.8 million,
for a current ratio of 3.7: 1.
→ Average return on equity was 12.9%.
→ Repurchase of 20,000 common shares for $0.8 mil-
lion and payment of $33.5 million in dividends to
shareholders. Richelieu thus distributed $34.3 million
to shareholders in 2023 while maintaining the finan-
cial resources necessary for growth in 2024.
Six acquisitions completed in North America in
fiscal 2023
→ January 1, 2023: acquisition of Unigrav and Usimm,
two companies offering customized products,
including a 3D scanning centre, operating in
Drummondville and Montreal, QC.
→ January 4, 2023: acquisition of Quincaillerie Rabel,
a specialty hardware distributor with a distribution
centre in Terrebonne, QC.
→ January 6, 2023: acquisition of Trans-World
Distributing, a distributor of industrial fasteners
which operates a distribution centre in Dartmouth, NS.
(1) EBITDA is a non-IFRS measure, as indicated on page 42 of
this report.
RichelieuAnnual Report 2023Management’s Report → April 3, 2023: acquisition of Maverick Hardware, a
distributor of specialty hardware products with its
distribution centre in Eugene, 0R.
→ April 30, 2023: acquisition of Westlund Distributing, a
distributor of specialty hardware products operating
a distribution centre located in Monticello, MN.
PRESENTATION BASIS
This Management’s Discussion and Analysis (“MD&A”)
relates to Richelieu Hardware Ltd.’s consolidated
operating results and cash flows for the year ended
November 30, 2023, in comparison with the year
ended November 30, 2022, as well as the Corporation’s
financial position as at those dates. This report should
be read in conjunction with the audited consolidated
financial statements and accompanying notes for the
year ended November 30, 2023 appearing in this Annual
Report. In this MD&A, “Richelieu” or the “Corporation”
designates, as the case may be, Richelieu Hardware
Ltd. and its subsidiaries and divisions, or one of its
subsidiaries or divisions. Supplementary information,
such as the Annual Information Form, interim MD&As,
Management Proxy Circular, certificates signed by the
Corporation’s President and Chief Executive Officer
and Vice-President and Chief Financial Officer, as
well as press releases issued during the year ended
November 30, 2023, are available on SEDAR+ website
at www.sedarplus.com and on the Corporation’s website
at www.richelieu.com.
The information contained in this MD&A accounts for any
major event that occurred prior to January 18, 2024, on
which date the audited consolidated financial statements
and MD&A were approved by the Corporation’s Board
of Directors. Unless otherwise indicated, the financial
information presented below, including amounts shown
in tables, is expressed in Canadian dollars and prepared
in accordance with International Financial Reporting
Standards (“IFRS”).
FORWARD-LOOKING STATEMENTS
Certain statements set forth in this MD&A, including
statements relating to the expected adequacy of cash
flows to cover contractual commitments, to maintain
growth and to provide for financing and investing
activities, growth outlook, Richelieu’s competitive
position in its industry, or ability to weather current
economic conditions, access other external financing,
close new acquisitions, and other statements not
pertaining to past events, constitute forward-looking
statements. In some cases, these statements are
identified by the use of terms such as “may”, “could”,
“might”, “intend” “should”, “expect”, “project”, “plan”,
“believe”, “estimate” or the negative form of these
expressions or other comparable variants. These
statements are based on the information available at
the time they are written, on assumptions made by
management and on the expectations of management,
acting in good faith, regarding future events, including
on the assumption that economic conditions and
exchange rates will not significantly deteriorate, that
supplies will be sufficient to fulfil Richelieu’s needs, the
availability of credit will remain stable during the year
and no extraordinary events will require supplementary
capital expenditures.
Although management believes these assumptions and
expectations to be reasonable based on the information
available at the time they were prepared, they could
prove inaccurate. Forward-looking statements are also
subject, by their very nature, to known and unknown
risks and uncertainties such as those related to the
industry, acquisitions, labour relations, credit, key
officers, supply and product liability as well as other
factors set forth in the “Risk Factors” section on page 52.
Richelieu’s actual results could differ materially from
those indicated in or underlying these forward-looking
statements. The reader is therefore cautioned not
to place undue reliance on these forward-looking
statements. Forward-looking statements do not reflect
the potential impact of special items, any business
combination or any other transaction that may be
announced or occur subsequent to the date hereof.
Richelieu undertakes no obligation to update or revise
the forward-looking statements to account for new
events or new circumstances, except as required by law.
41
RichelieuAnnual Report 2023Management’s Report NON-IFRS MEASURES
Richelieu’s offer
112 interconnected centres
Richelieu uses earnings before interest, income taxes
and amortization (“EBITDA”) as we believe this measure
enables management to assess the Corporation’s
operational performance. This measure is a widely
accepted performance indicator of a corporation’s
ability to service and incur debt. However, EBITDA
should not be considered by an investor as an alterna-
tive to operating income or net earnings attributable
to shareholders of the Corporation, as an indicator of
financial performance or cash flows, or as a measure
of liquidity. Since EBITDA does not have a standardized
meaning prescribed by IFRS, it may not be comparable
to EBITDA of other companies.
Richelieu also uses adjusted cash flows from operating
activities and adjusted cash flows from operating
activities per share. Adjusted cash flows from operating
activities are based on net earnings plus amortization
of property, plant and equipment and right-of-use
assets and of intangible assets, deferred tax expense (or
recovery), share-based compensation expense and net
financial costs. These additional measures do not con-
sider the net change in non-cash working capital items
in order to exclude seasonality effects and are used
by management in its assessments of cash flows from
long-term operations. Therefore, adjusted cash flows
from operating activities may not be comparable to the
cash flows from operating activities of other companies.
GENERAL BUSINESS OVERVIEW
AS AT NOVEMBER 30, 2023
Richelieu is a leading North American importer,
manufacturer and distributor of specialty hardware
and related products.
Richelieu offers customers a broad mix of products
sourced from manufacturers worldwide. The solid
relationships Richelieu has built with the world’s leading
suppliers enable it to provide customers with the latest
innovative products tailored to their business needs.
The residential and commercial renovation industry is
one of the Corporation’s principal sources of growth.
Over 130,000
different items
More than 110,000
active customers
50 distribution centres
in Canada
59 distribution centres
in the United States
4,800,000 sq.ft. of storage
3 manufacturing plants
Main product categories
Furniture, glass and
building decorative and
functional hardware
Sliding door systems
Decorative and
functional panels
Lighting systems
High pressure laminates
Finishing and
decoration products
Ergonomic workstations
components
Kitchen and closet
storage solutions
Baluster and railings
Floor protection products
Power tools accessories
Those products are targeted to an extensive customer
base of kitchen and bathroom cabinet, storage and
closet, home furnishing and office furniture, door and
window manufacturers, residential and commercial
woodworkers, as well as hardware retailers including
renovation superstores.
This offering is completed by the Corporation’s three
manufacturing subsidiaries (Les Industries Cedan inc.,
Menuiserie des Pins Ltée and Usimm Unigrav inc.), which
manufacture a variety of veneer sheets and edge band-
ing products, a broad selection of decorative mouldings
and components for the window and door industry as
well as custom products, including a 3D scanning centre.
The Corporation employs more than 3,000 people at
its head office and throughout its network, close to
half of whom work in marketing, sales and customer
service. Nearly 50% of the Corporation’s employees
are Richelieu shareholders.
42
RichelieuAnnual Report 2023Management’s Report MAIN TRADEMARKS
MISSION AND STRATEGY
Richelieu’s mission is to create shareholder value and
contribute to its customers’ growth and success, while
favouring a business culture focused on quality of
service and results, partnership and intrapreneurship.
To sustain its growth and remain leader in its specialty
market, the Corporation continues to implement the
strategy that has proved beneficial to date, with a
particular focus on:
→ strengthening its product offering by continuously
introducing, each year, new diversified products that
meet its market segment needs and position it as the
specialist in functional and decorative hardware for
manufacturers and retailers;
→ further developing its current markets in Canada and
the United States with the support of a specialized
sales and marketing team capable of providing
customers with personalized service; and
→ pursuing its North American expansion by opening
new distribution centres and through efficiently
integrated, profitable acquisitions made at the right
price, offering high growth potential and complemen-
tarity to its product mix and expertise.
Richelieu’s solid and efficient organization, highly
diversified product selection and long-term relationships
with leading suppliers worldwide allows the Corporation
to compete effectively in a fragmented market consisting
mainly of a host of regional distributors offering a limited
range of products.
NETWORK DEVELOPMENT
During 2023 fiscal year, Richelieu concluded the following acquisitions:
Date
Company name
Nature of operations
Locations
January 1st
Usimm and Unigrav
2 companies offering custom products,
including a 3D scanning centre
Drummondville and Montreal, QC
January 4
Quincaillerie Rabel
Specialized hardware distributor
January 6
Trans-World Distributing
Distributor of industrial fasteners
April 3
Maverick Hardware
Specialized hardware distributor
April 30
Westlund Distributing
Specialized hardware distributor
Terrebonne, QC
Dartmouth, NS
Eugene, OR
Monticello, MN
Sales of $23.5 million have been generated by these
acquisitions. Had those acquisitions been made on
December 1, 2022, management believes that sales
would have totalled approximately $27.0 million.
The Corporation also completed expansion and
modernization projects at its centres in the Atlanta,
Nashville, Fort Myers, Pompano and Seattle areas.
A brand-new Chicago centre serving the retail market
is fully operational, as are the two new centres in the
Minneapolis, MN and Carlstadt, NJ regions. Furthermore,
in December 2023, its expansion project in Calgary was
completed with the refitting of two centres into a single
250,000 sq. ft. building.
43
RichelieuAnnual Report 2023Management’s Report Financial Highlights
(in thousands of $, except per-share amounts, number of shares and data expressed as a %)
Years ended November 30
2023
$
2022
$
2021
$
2020
$
20193
$
Sales
EBITDA1
EBITDA margin (%)
Net earnings
Net earnings attributable to
shareholders of the Corporation
Per share - basic ($)
Per share - diluted ($)
Net margin (%)
1,787,754
1,802,787
1,440,416
1,127,840
1,041,647
230,404
287,442
234,398
154,461
124,207
12.9
15.9
16.3
13.7
11.9
113,827
169,949
142,331
85,611
66,671
111,474
168,390
141,764
85,222
66,471
2.00
1.98
6.2
3.01
2.99
9.3
2.54
2.51
9.8
1.51
1.50
7.6
1.17
1.16
6.4
Adjusted cash flows from operating activities2
190,483
227,795
182,991
121,125
98,390
Per share - diluted ($)
3.39
4.04
3.24
2.14
1.72
Dividends paid to Shareholders
of the Corporation
Per share ($)4
Weighted average number of shares
outstanding (diluted) (in thousands)
As at November 30
Total assets
Working capital
Current ratio
Equity
Return on average shareholders equity (%)
Book value per share ($)
Long-term debt
Net cash and cash equivalents
(net bank overdraft)
33,521
0.600
29,083
0.520
19,374
0.280
11,284
0.200
14,424
0.253
56,216
56,345
56,466
56,646
57,192
1,314,963
1,283,865
964,180
771,056
672,146
621,764
562,548
456,376
377,408
335,467
3.7
2.6
3.3
3.6
4.1
904,893
817,157
666,442
551,094
498,384
12.9
16.13
5,346
22.7
14.65
6,067
23.3
11.93
6,439
16.2
9.86
5,792
13.7
8.86
5,659
23,710
(111,988)
58,707
73,928
24,701
(1) EBITDA is a non-IFRS measure, as indicated on page 42 of this report.
(2) Adjusted cash flows from operating activities and adjusted cash flows from operating activities per share are non-IFRS measures,
as indicated on page 42 of this report.
(3) Those figures have been restated following the adoption of IFRS 16 on December 1, 2019.
(4) The amount per share presented for 2021 excludes a special dividend paid of $0.0667 per share.
44
RichelieuAnnual Report 2023Management’s Report Analysis of operating results
for the year ended November 30, 2023, compared with the year ended November 30, 2022
CONSOLIDATED SALES
The following table provides an overview of Richelieu’s sales in its two main markets for the years ended November 30,
2023 and 2022:
(in millions of dollars except exchange rates)
Consolidated
Manufacturers
Retailers
Canada
Manufacturers
Retailers
United States $US
Manufacturers
Retailers
United States $CA
Average exchange rates
2023
$
2022
$
1,787.8
1,802.8
1,539.6
1,552.0
248.2
250.8
1,048.1
1,074.7
855.7
192.4
547.5
506.2
41.3
739.7
1.351
876.6
198.1
562.5
521.7
40.8
728.1
1.294
∆ %
Total
(0.8)
(0.8)
(1.0)
(2.5)
(2.4)
(2.9)
(2.7)
(3.0)
1.2
1.6
Internal
Acquisitions
(2.6)
(2.9)
(1.1)
(4.4)
(4.7)
(2.9)
(4.4)
(4.8)
1.2
1.8
2.1
0.1
1.9
2.3
—
1.7
1.8
—
Consolidated sales reached $1.8 billion, a decrease of $15.0 million or 0.8% over last year, of which 1.8% from
acquisitions and 2.6% from internal decrease. In currency comparable to that of the 2022 financial year, the decrease
in consolidated sales for the year ended November 30, 2023, would have been 2.6%.
(in millions of dollars, except per share data)
Sales
Operating expenses excluding amortization
EBITDA
EBITDA margin (%)
Amortization of property, plant and equipment and right-of-use assets
Amortization of intangible assets
Net financial costs
Earnings before income taxes
Income taxes
Net earnings
Net earnings attributable to:
Shareholders of the Corporation
Non-controlling interests
Net earnings per share attributable to shareholders of the Corporation
Basic
Diluted
Years ended November 30
2023
$
2022
$
1,787.8
1,802.8
1,557.4
1,515.3
∆ %
(0.8)
2.8
230.4
287.4
(19.8)
12.9
50.1
10.9
13.3
74.2
156.2
42.4
113.8
111.5
2.4
2.00
1.98
15.9
38.0
10.6
7.1
55.8
231.7
61.7
169.9
168.4
1.6
3.01
2.99
31.7
2.1
85.9
33.0
(32.6)
(31.3)
(33.0)
(33.8)
50.9
(33.6)
(33.8)
RichelieuAnnual Report 2023Management’s Report
Earnings before interest, income taxes and amortization
(EBITDA) totalled $230.4 million, down by $57.0 million or
19.8% over 2022. This can be explained by the increase
in operating costs, including external warehousing,
resulting from the temporary increase in inventories,
in expenses specific to major expansion projects
undertaken during the 2023 financial year and by the
effect of the increase in the US foreign exchange rate
compared to the CA$ currency on the translation of the
operating expenses in US currency. The gross margin
is also slightly down, therefore EBITDA margin stood at
12.9%, compared with 15.9% for 2022.
increase of $6.1 million resulting mainly from the use
of lines of credit and the increase in lease obligations.
Income taxes amounted to $42.4 million, a decrease of
$19.3 million over 2022.
Net earnings were down 33.0%. Considering non-
controlling interests, net earnings attributable to
shareholders of the Corporation totalled $111.5 million,
a decrease of 33.8% compared to 2022. Net earnings
per share amounted to $2.00 basic and $1.98 diluted,
compared with $3.01 basic and $2.99 diluted for 2022, a
decrease of 33.6% and 33.8% respectively.
Amortization expenses amounted to $60.9 million
compared with $48.6 million for 2022, an increase of
$12.3 million, a result of the increase in property, plant
and equipment and right-of-use assets stemming mainly
from lease renewal, recent business acquisitions and
expansion and modernization projects. Net financial
costs were $13.3 million compared to $7.1 million, an
Comprehensive income totalled $114.7 million, reflecting
a positive adjustment of $0.9 million on translation of
the financial statements of the subsidiary in the United
States, compared with $183.4 million for 2022, which
reflected a positive adjustment of $13.5 million on
translation of the financial statements of the subsidiary
in the United States.
QUARTERLY DATA (unaudited)
(in millions of dollars. except per share data)
Q1
Q2
Q3
Q4
2023
Sales
EBITDA
Net earnings attributable to shareholders of the Corporation
Basic per share ($)
Diluted per share ($)
2022
Sales
EBITDA
Net earnings attributable to shareholders of the Corporation
Basic per share ($)
Diluted per share ($)
2021
Sales
EBITDA
Net earnings attributable to shareholders of the Corporation
Basic per share ($)
Diluted per share ($)
46
403.0
472.1
459.0
453.7
49.1
22.4
0.40
0.40
Q1
61.5
30.7
0.55
0.55
Q2
61.0
29.8
0.53
0.53
Q3
58.8
28.5
0.51
0.51
Q4
384.5
487.9
472.9
457.5
53.7
30.1
0.54
0.53
Q1
77.9
47.0
0.84
0.83
Q2
79.2
46.4
0.83
0.82
Q3
76.7
44.9
0.80
0.80
Q4
297.6
371.4
373.3
398.2
38.2
21.0
0.38
0.37
61.0
37.4
0.67
0.66
63.9
38.7
0.69
0.69
71.3
44.6
0.80
0.79
RichelieuAnnual Report 2023Management’s Report Quarterly variations in earnings — The first quarter
closing at the end of February is generally the year’s
weakest quarter for Richelieu in light of fewer number
of business days due to the end-of-year holiday
period and the wintertime slowdown in renovation and
construction work. The third quarter ending August 31
also includes fewer business days due to the summer
holidays, which can be reflected in the period’s financial
results. The second and fourth quarters ending May 31
and November 30, respectively, generally represent the
year’s most active periods.
FOURTH QUARTER ENDED NOVEMBER 30, 2023
Sales
The following table provides an overview of Richelieu’s sales in its two main markets for the quarters ended
November 30, 2023 and 2022:
Quarters ended November 30
∆ %
(in millions of dollars except exchange rates)
Consolidated
Manufacturers
Retailers
Canada
Manufacturers
Retailers
United States $US
Manufacturers
Retailers
United States $CA
Average exchange rates
2023
$
453.7
393.1
60.6
267.5
220.3
47.2
136.3
126.4
9.9
186.2
1.366
2022
$
457.5
397.7
59.8
273.5
226.0
47.5
136.4
127.3
9.1
184.0
1.349
Total
Internal
Acquisitions
(0.8)
(1.2)
1.3
(2.2)
(2.5)
(0.6)
(0.1)
(0.7)
8.8
1.2
(2.2)
(2.8)
1.3
(4.0)
(4.7)
(0.8)
(0.9)
(1.6)
8.8
1.4
1.6
—
1.8
2.2
0.2
0.8
0.9
—
Fourth-quarter consolidated sales amounted to
$453.7 million, compared with $457.5 million for the cor-
responding quarter of 2022, a decrease of $3.8 million
or 0.8%, of which 2.2% resulting from internal decrease,
partially offset by 1.4% growth from acquisitions. At
comparable exchange rates to the fourth quarter of
2022, the consolidated sales decrease would have been
1.3% for the quarter ended November 30, 2023.
Earnings before interest, income taxes and amortization
(EBITDA) amounted to $58.8 million compared with
$76.7 million in the fourth quarter of 2022, down 23.3%.
The gross margin is down compared to the previous
year and the EBITDA margin stood at 13.0%, compared
with 16.8% for the fourth quarter of 2022, influenced by
the return to pre-pandemic levels of certain operating
expenses as well as expenses specific to major expan-
sion projects incurred during the quarter.
Amortization expenses amounted to $16.4 million com-
pared with $13.1 million for the corresponding quarter of
2022, an increase of $3.3 million. Net financial costs are
down $0.6 million mainly due to the significant reduction
in line of credit balances. Income taxes amounted to
$10.8 million compared with $15.0 million for the fourth
quarter of 2022.
Net earnings were $29.4 million, down by 35.7% over the
corresponding quarter of 2022. Considering non-con-
trolling interests, net earnings attributable to sharehold-
ers of the Corporation amounted to $28.5 million, down
by 36.5% over the fourth quarter of 2022. Net earnings
per share were $0.51 basic and diluted, compared with
$0.80 basic and diluted for the fourth quarter of 2022.
Comprehensive income amounted to $29.8 million,
reflecting a positive adjustment of $0.4 million on
translation of the financial statements of the subsidiary
47
RichelieuAnnual Report 2023Management’s Report in the United States, compared with $53.2 million for
the fourth quarter of 2022, which reflected a positive
adjustment of $7.5 million on translation of the financial
statements of the subsidiary in the United States.
FINANCIAL POSITION
as at November 2023
Analysis of significant cashflows
Cash flows from operating activities (before net change
in non-cash working capital balances) amounted
to $49.3 million or $0.88 per share, compared with
$62.2 million or $1.11 per share for the fourth quarter of
2022, a decrease of 20.7% resulting primarily from net
earnings decrease. The net change in non-cash working
capital balances represented a cash inflow of $23.3 mil-
lion, reflecting the change in inventory and accounts
receivable of $25.3 million, whereas the change in
accounts payable and other items required cash flows of
$1.9 million. Consequently, operating activities provided
cash flows of $72.7 million, compared with $3.6 million
for the fourth quarter of 2022.
Financing activities used cash flows of $14.3 million,
compared with $21.6 million for the fourth quarter of
2022. This change primarily resulted from $4.7 million
of issued shares in the fourth quarter compared to
$0.2 million in the corresponding quarter, and common
share repurchases of $4.4 million for the fourth quarter
of 2022 while no share repurchases were made in the
fourth quarter of 2023.
Investing activities used cash flows of $19.2 million in
the fourth quarter mainly for the purchase of a building
housing Usimm Unigrav inc. operations, in addition
to adding storage space for the acquisition of various
tangible assets related to expansion and construction
projects as well as for the purchase of equipment to
maintain and improve operational efficiency.
(in millions of $)
Cash flows provided by (used in):
Operating activities
Financing activities
Investing activities
Effect of exchange rate changes
on cash and cash equivalents
Net change in cash and cash
equivalents and bank overdraft
Cash and cash equivalents (bank
overdraft), beginning of period
Cash and cash equivalents (bank
overdraft), end of period
Years closed on
November 30
2023
$
2022
$
270.7
(32.9)
(72.4)
(70.0)
(61.8)
(66.8)
(0.8)
(1.1)
135.7
(170.7)
(112.0)
58.7
23.7
(112.0)
Reconciliation of cash flow from operating activities to
adjusted cash flow from operating activities:
(in millions of $)
Years closed on
November 30
2023
$
2022
$
Cash flow from operating activities
270.7
(32.9)
Net change in non-cash working
capital balances (inflow)
Adjusted cash flows from
operating activities
(80.2)
260.7
190.5
227.8
Operating activities
Cash flows from operating activities (before net
change in non-cash working capital balances) reached
$190.5 million or $3.39 diluted per share, compared
with $227.8 million or $4.04 diluted per share for 2022,
a decrease of 16.4% mainly reflecting the net earnings
decrease. The net change in non-cash working capital
balances represented a cash inflow of $80.2 million,
mainly representing changes in inventory of $97.1 million
whereas accounts receivable, payable and other items
used cash flows of $16.9 million. Consequently, operating
activities generated a cash inflow of $270.7 million
compared to a cash outflow of $32.9 million for 2022.
48
RichelieuAnnual Report 2023Management’s Report The expectation set forth above consists of forward-
looking information based on the assumption that
economic conditions and exchange rates will not
deteriorate significantly, operating expenses will not
increase considerably, deliveries will be sufficient to
fulfill Richelieu’s requirements, the availability of credit
will remain stable in 2024, and no unusual events will
entail additional capital expenditures. This expectation
also remains subject to the risks identified under the
“Risk Factors” section.
Analysis of financial position
(in millions of dollars,
except exchange rates)
Current assets
Non-current assets
2023
$
859.5
455.5
2022
$
∆ %
910.8
(5.6)
373.1
22.1
Total
1,315.0
1,283.9
2.4
237.7
169.1
348.2
(31.7)
115.8
46.0
Current liabilities
Non-current liabilities
Equity attributable
to shareholders of
the Corporation
10.7
22.5
2.4
904.9
817.2
Non-controlling interests
3.3
2.7
Total
1,315.0
1,283.9
Exchange rates
on translation of
subsidiaries in the
United States
Assets
1.358
1.351
Total assets amounted to $1.3 billion as at November 30,
2023, an increase of 2.4 %. Current assets were down by
5.6% or $51.3 million from November 30, 2022, mainly
resulting from the decrease in inventories. Non-current
assets increased by 22.1%, mainly due to the addition of
right-of-use assets and property, plant and equipment
related to lease renewals and expansion projects.
Financing activities
Financing activities used cash flows of $72.4 million,
compared with $70.0 million for 2022. During the year,
Richelieu repaid long-term debt of $5.3 million, paid
lease obligations of $34.1 million and issued shares for
$8.6 million, compared to a long-term debt repayment of
$5.2 million, lease obligations payments of $25.9 million
and a $6.3 million share issued in 2022. Dividends
paid to shareholders of the Corporation amounted to
$33.5 million compared to $29.1 million up 15.3% over
2022. The Corporation also repurchased common
shares for an amount of $0.8 million compared with
$12.3 million in 2022.
Investing activities
Investing activities used cash flows of $61.8 million, of
which $19.7 million was for the six business acquisitions
completed in fiscal 2023 and $42.1 million, mainly
for equipment to maintain and improve operational
efficiency, including additions resulting from expan-
sion projects and for the purchase of a building in
Drummondville.
Sources of financing
As at November 30, 2023, cash and cash equivalent
net of bank overdraft amounted to $23.7 million,
compared with net bank overdraft of $112.0 million as
at November 30, 2022. The Corporation had a working
capital of $621.8 million for a current ratio of 3.7: 1,
compared with $562.5 million as at November 30, 2022.
Richelieu believes it has the capital resources to fulfill
its ongoing commitments and obligations and to assume
the funding requirements needed for its growth and
the financing and investing activities between now and
the end of 2024. The Corporation continues to benefit
from an authorized line of credit of C$150 million
[2022 — C$150 million] as well as a line of credit of
US$56 million [2022 — US$56 million as at November 30,
2022] renewable annually and bearing interest at prime
rate and BSBY rate plus 1.05% respectively. In addition,
Richelieu considers it could obtain access to other
outside financing if necessary.
49
RichelieuAnnual Report 2023Management’s Report Cash position and long-term debt
(in millions of dollars)
Current portion of
long-term debt
Long-term debt
Total debt
2023
$
2.9
2.4
5.3
2022
$
5.2
0.9
6.1
Net cash and cash equivalents
(net bank overdraft)
23.7
(112.0)
Shareholders’ equity and share capital
Equity attributable to shareholders of the Corporation
totalled $904.9 million as at November 30, 2023,
compared with $817.2 million as at November 30, 2022,
an increase of $87.7 million. This increase is mainly due
to a rise of $75.8 million in retained earnings, which
amounted to $795.0 million, and of $11.1 million in share
capital and contributed surplus, while accumulated
other comprehensive income increased by $0.9 million.
As at November 30, 2023, the book value per share was
$16.13, up by 10.1% over November 30, 2022, and the
return on average shareholders’ equity was 12.9%.
As at November 30, 2023, the Corporation’s share
capital consisted of 56,088,365 common shares
(55,784,790 shares as at November 30, 2022). In 2023,
upon the exercise of stock options under the stock
option plan, Richelieu issued 323,575 common shares
at an average price of $26.43 (271,000 in 2022 at an
average price of $23.19). The Corporation granted
306,500 stock options in fiscal 2023 (276,000 in 2022)
and cancelled 41,000 (17,125 in 2022). Consequently,
as at November 30, 2023, 1,620,925 stock options were
outstanding (1,679,000 as at November 30, 2022).
Number of shares
Number of options
Outstanding at beginning of period
55,784,790 Outstanding at beginning of period
Issued
Repurchased
Other
323,575
Exercised
(20,000) Granted
—
Cancelled
Outstanding, end of period
56,088,365 Outstanding, end of period
1,679,000
(323,575)
306,500
(41,000)
1,620,925
CONTRACTUAL COMMITMENTS
As at November 30, 2023
(in millions of $)
Less
than 1
year
Between
1 and 5
years
More
than 5
years
Total
Long-term debt
2.9
2.4
—
5.3
Operating leases
37.6
109.1
63.3
210.0
Total
40.5
111.5
63.3
215.3
For 2024 and for the foreseeable future, the Corporation
expects that cash flows from operating activities and
other sources of financing will be sufficient to meet its
ongoing contractual commitments.
The expectation set forth above consists of for-
ward-looking information based on the assumption
that economic conditions and exchange rates will not
deteriorate significantly, operating expenses will not
increase considerably, deliveries will be sufficient to
fulfill Richelieu’s requirements, the availability of credit
will remain stable in 2024, and no unusual events will
entail additional capital expenditures. This expectation
also remains subject to disclosed “Risk Factors”.
FINANCIAL INSTRUMENTS
Richelieu periodically enters into foreign exchange
forward contracts to fully or partially hedge the effects of
foreign currency fluctuations related to foreign-currency
denominated liabilities or to hedge forecasted purchase
transactions. The Corporation has a policy of not
entering into derivatives for speculative or negotiation
purposes and to enter into these contracts only with
major financial institutions.
Richelieu also uses equity swaps to reduce the effect of
fluctuations in its share price on net earnings in connec-
tion with its deferred share unit plan.
50
RichelieuAnnual Report 2023Management’s Report In notes 1 and 13 of the audited consolidated financial
statements for the year ended November 30, 2023, the
Corporation presents the information on the classifica-
tion and fair value of its financial instruments, as well as
on their value and management of the risks arising from
their use.
INTERNAL CONTROL OVER FINANCIAL REPORTING
Management has designed and evaluated internal
controls over financial reporting (ICFR) and disclosure
controls and procedures (DC&P) to provide reasonable
assurance that the Corporation’s financial reporting
is reliable and that its publicly disclosed financial
statements are prepared in accordance with IFRS. The
President and Chief Executive Officer and the Vice-
President and Chief Financial Officer have assessed,
within the meaning of National Instrument 52-109 -
Certification of Disclosure in Issuers’ Annual and Interim
Filings, the design and the effectiveness of internal con-
trols over financial reporting as at November 30, 2023. In
light of this assessment, they concluded that the design
and the effectiveness of internal controls over financial
reporting (ICFR and DC&P) were effective. During the
year ended November 30, 2023, management ensured
that there were no material changes in the Corporation’s
procedures that were reasonably likely to have a material
impact on its internal control over financial reporting. No
such changes were identified.
Due to their intrinsic limits, internal controls over
financial reporting only provide reasonable assurance
and may not prevent or detect misstatements. In
addition, projections of an assessment of effectiveness
in future periods carry the risk that controls will become
inappropriate as a result of changes in conditions or if
the degree of conformity with standards and methods
should deteriorate.
Corporation may undertake in the future and other
factors deemed relevant and reasonable.
The judgments made by management in applying the
accounting policies that have the most significant effect
on the amounts recognized in the consolidated financial
statements and the assumptions about the future and
other major sources of estimation uncertainty as at
the end of the reporting period that could potentially
result in material adjustments to the carrying amount of
assets and liabilities during the following period is the
impairment of inventory, including inventory losses and
obsolescence. This item requires the use of judgment
and assumptions that may affect the amounts reported
in the consolidated financial statements. The underlying
estimates and assumptions are regularly reviewed.
Revised accounting estimates, if any, are recognized in
the period in which the estimates are revised, as well as
in the future periods affected by the revisions. Actual
results could differ from those estimates.
SUBSEQUENT EVENTS
Effective December 1, 2023, the Corporation acquired
all issued and outstanding share capital of Olympic
Forest Products Inc., a distributor of specialized lumber
and panel products operating one distribution centre in
Erin, ON.
Effective January 1, 2024, the Corporation acquired from
minority shareholders an additional 15% interest in the
voting shares of Provincial Woodproducts Ltd., thereby
increasing its interest to 100%.
Effective January 15, 2024, the Corporation acquired
the principal net assets of Rapid Start, a distributor of
specialized hardware operating one distribution centre
in Rittman, OH.
SIGNIFICANT ACCOUNTING
POLICIES AND ESTIMATES
NEW ACCOUNTING POLICIES
In May 2021, the IASB amended IAS 12 “Income Taxes” to
narrow the scope of the recognition exemption so that it
does not apply to transactions that, on initial recognition,
give rise to equal taxable and deductible temporary
differences. The amendments apply to fiscal years
beginning on or after January 1, 2023. The Corporation
believes that these amendments will have no impact on
its consolidated financial statements.
The Corporation’s audited consolidated financial
statements for the year ended November 30, 2023,
have been prepared by management in accordance
with International Financial Reporting Standards
(IFRS). The preparation of the consolidated financial
statements requires management to make estimates
and assumptions that affect the amounts reported in the
consolidated financial statements and accompanying
notes. These estimates are based on management’s
best knowledge of current events and actions that the
51
RichelieuAnnual Report 2023Management’s Report RISK FACTORS
Richelieu is exposed to different risks that can have a
material adverse effect on its profitability. To offset such
risks, the Corporation has adopted various strategies
adapted to the major risk factors below:
Economic conditions
The Corporation’s business and financial results partly
depend on general economic conditions and the
economic factors specific to the renovation and con-
struction industry. Any economic downturn could lead
to a decline in sales and have an adverse impact on the
Corporation’s financial performance.
Market and competition
The specialty hardware and renovation products
segment is highly competitive. Richelieu has developed
a business strategy rooted in a diversified product
offering in various targeted niche markets in North
America and sourced from suppliers around the world,
in creative marketing and in unparalleled expertise and
quality of service. Up to now, this strategy has enabled
it to benefit from a solid competitive edge. However,
if Richelieu were unable to implement its business
strategy with the same success in the future, it could lose
market shares and its financial performance could be
adversely affected.
Foreign currency
Richelieu is exposed to the risks related to currency
fluctuations, primarily in regard to foreign-currency
denominated purchases and sales made abroad.
The Corporation’s products are regularly sourced from
abroad. Thus, any increase in foreign currencies (primar-
ily the U.S. dollar and euro) compared with the Canadian
dollar tends to raise its supply cost and thereby affect its
consolidated financial results. These currency fluctu-
ations related risks are mitigated by the Corporation’s
ability to adjust its selling prices within a relatively short
timeframe so as to protect its profit margins although
significant volatility in foreign currencies may have an
adverse impact on its sales.
Sales made abroad are mainly recorded in the United
States and account for approximately 41% of Richelieu’s
total sales. Any volatility in the Canadian dollar therefore
tends to affect consolidated results. This risk is partially
offset by the fact that major purchases are denominated
in U.S. dollars.
To manage its currency risk, the Corporation uses
derivative financial instruments, more specifically
forward exchange contracts in U.S. dollars and euros.
There can be no assurance that the Corporation will not
sustain losses arising from these financial instruments or
fluctuations in foreign currency.
Supply and inventory management
Richelieu must anticipate and meet its customers’
supply needs. To that end, Richelieu must maintain solid
relationships with suppliers respecting its supply criteria.
The inability to maintain such relationships or to
efficiently manage the supply chain and inventories
could affect the Corporation’s financial position.
Similarly, Richelieu must track trends and its customers’
preferences and maintain inventories meeting their
needs, failing which its financial performance could be
adversely affected.
To mitigate its supply-related risks, Richelieu has built
solid long-term relationships with numerous suppliers on
several continents, most of whom are world leaders.
Acquisitions
Acquisitions in North America remain an important stra-
tegic focus for Richelieu. The Corporation will maintain
its strict acquisition criteria and pay particular attention
to the integration of its acquisitions. Nevertheless, there
is no guarantee that a business matching Richelieu’s
acquisition criteria will be available and there can be
no assurance that the Corporation will be able to make
acquisitions at the same pace as in the past. However,
the fact that the U.S. market remains highly fragmented
and that acquisitions are generally of limited size
reduces the inherent financial and operational risks.
52
RichelieuAnnual Report 2023Management’s Report IT contingency plan and data security
The IT structure implemented by Richelieu enables it to
support its operations and contributes to ensure their
efficiency. As the occurrence of a disaster, including
a major interruption of its computer systems, could
affect its operations and financial performance, the
Corporation has implemented a crisis management
and IT contingency plan to reduce the extent of such a
risk. This plan provides among others for an alternate
physical location in the event of a disaster, generators
in the event of power outages and a relief computer as
powerful as the central computer.
A breach of the Corporation’s IT security, loss of cus-
tomer data or system disruption could adversely affect
its business and reputation.
Richelieu’s business is dependent on its online sales,
payroll, transaction, financial, accounting and other data
processing systems. The Corporation relies on these
systems to process, on a daily basis, a large number
of transactions. Any security breach in its business
processes and/or systems has the potential to impact its
customer information, which could result in the potential
loss of business. If any of these systems fail to operate
properly or become disabled, the Corporation could
potentially lose control of customer data and suffer
financial loss, a disruption of its businesses, liability
to customers, regulatory intervention or damage to
its reputation.
In addition, any issue of data privacy as it relates to
unauthorized access to, or loss of, customers and/or
employees information could result in the potential loss
of business, damage to Richelieu’s market reputation,
litigation and regulatory investigation and penalties.
To reduce its risk, the Corporation continuously invests
in the security of its IT systems, business processes
improvements and enhancements to its culture of
information security.
Credit
The Corporation is exposed to the credit risk related to
its accounts receivable. Richelieu has adopted a policy
defining the credit conditions for its customers to safe-
guard against credit losses arising from doing business
with them. For each customer, the Corporation sets a
specific limit that is regularly reviewed. The diversifica-
tion of its products, customers and suppliers reasonably
safeguards the Corporation against a concentration of its
credit risk. No customer of the Corporation accounts for
more than 10% of its revenues.
Labour relations and qualified employees
To achieve its objectives, Richelieu must attract, train and
retain qualified employees while controlling its payroll.
The inability to attract, train and retain qualified employ-
ees and to control its payroll could have an impact on
the Corporation’s financial performance. Close to 12%
of Richelieu’s workforce is unionized. The Corporation’s
policy is to negotiate collective agreements at conditions
enabling it to maintain its competitive edge and a
positive and satisfactory working environment for its
entire team. Richelieu has not experienced any major
labour conflicts over the past five years. Any interruption
in operations as a result of a labour conflict could have
an adverse impact on the Corporation’s financial results.
Stability of key officers
Richelieu offers a stimulating working environment
and a competitive compensation plan, which help it
retain a stable management team. Failure to retain
the services of a highly qualified management team
could compromise the success of Richelieu’s strategic
execution and expansion, which could have an adverse
impact on its financial results. To adequately manage its
future growth, the Corporation adjusts its organizational
structure as needed and strengthens the teams at the
various levels of its business. It should be noted that
close to 50% of its employees, including senior officers,
are Richelieu shareholders.
Product liability
In the normal course of business, Richelieu is exposed to
various product liability claims that could result in major
costs and affect the Corporation’s financial position.
Richelieu has agreements containing the usual limits
with insurance companies to cover the risks of claims
associated with its operations.
53
RichelieuAnnual Report 2023Management’s Report Natural disasters, terrorist acts, civil unrest,
pandemics and other disruptions and dislocations,
may adversely affect the Corporation
Upon the occurrence of a natural disaster, or upon an
incident of war, riot or civil unrest, the impacted country,
province, state or region may not efficiently and quickly
recover from such event, which could have a materially
adverse effect on the Corporation, its customers, and/or
either of their businesses or operations. Terrorist attacks,
public health crises including epidemics, pandemics or
outbreaks of new infectious disease or viruses, domestic
and global trade disruptions, infrastructure disruptions,
civil disobedience or unrest, natural disasters, national
emergencies, acts of war, technological attacks and
related events can result in volatility and disruption to
local and global supply chains, operations, mobility
of people and the financial markets, which could
affect interest rates, credit ratings, credit risk, inflation,
business, financial conditions, results of operations and
other factors relevant to the Corporation, its customers,
and/or either of their businesses or operations,
which may have a material adverse effect on the
Corporation’s reputation, business, financial conditions
or operating results.
SHARE INFORMATION AS AT JANUARY 18, 2024
Issued and outstanding common shares
56,118,765
Outstanding stock options
1,876,650
OUTLOOK
Soundly positioned and building on the strengths of its
diversified market segments, its value-added service
concept rooted in innovation and its one-stop-shop
approach, the performance of its website richelieu.com
and its financial soundness, Richelieu will continue to
drive growth through innovation and acquisitions, with
the contribution of its expert and committed team.
SUPPLEMENTARY INFORMATION
Further information about Richelieu, including its latest
Annual Information Form, is available on SEDAR+ website
at www.sedarplus.com and on the Corporation’s website
at www.richelieu.com.
(Signed) Richard Lord
President and
Chief Executive Officer
(Signed) Antoine Auclair
Vice-President and
Chief Financial Officer
January 18, 2024
54
RichelieuAnnual Report 2023Management’s Report Consolidated financial statements
Management’s report
Related to the consolidated financial statements
The consolidated financial statements of Richelieu Hardware Ltd. (the
“Corporation”) are the responsibility of the Corporation’s management.
These consolidated financial statements have been prepared by manage-
ment in accordance with IFRS and approved by the Board of Directors. The
Corporation maintains accounting and internal control systems which, in
management’s opinion, reasonably ensure the accuracy of the financial
information and maintain proper standards of conduct in the Corporation’s
activities. The Board of Directors fulfills its responsibility regarding the
consolidated financial statements, primarily through its Audit Committee.
This committee which meets periodically with the Corporation’s managers
and external auditors, has reviewed the consolidated financial statements
of the Corporation and has recommended that they be approved by the
Board of Directors.
The consolidated financial statements have been audited by the
Corporation’s external auditors, Ernst & Young LLP, Chartered Professional
Accountants.
Montreal, Canada, January 18, 2024.
(Signed) Richard Lord
President and
Chief Executive Officer
(Signed) Antoine Auclair
Vice-President and
Chief Financial Officer
Independant auditor’s report
To the shareholders of Richelieu Hardware Ltd.
Opinion
We have audited the consolidated financial statements of Richelieu
Hardware Ltd. and its subsidiaries [the “Corporation”], which comprise
the consolidated statements of financial position as at November 30, 2023
and 2022, and the consolidated statements of earnings, consolidated
statements of comprehensive income, consolidated statements of changes
in equity and consolidated statements of cash flows for the years then
ended, and notes to the consolidated financial statements, including a
summary of significant accounting policies.
In our opinion, the accompanying consolidated financial statements
present fairly, in all material respects, the consolidated financial position
of the Corporation as at November 30, 2023 and 2022, and its consolidated
financial performance and its consolidated cash flows for the years then
ended in accordance with International Financial Reporting Standards
[“IFRS”].
Basis for opinion
We conducted our audit in accordance with Canadian generally accepted
auditing standards. Our responsibilities under those standards are further
described in the Auditor’s responsibilities for the audit of the consolidated
financial statements section of our report. We are independent of the
Corporation in accordance with the ethical requirements that are relevant
to our audit of the consolidated financial statements in Canada, and we
have fulfilled our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment,
were of most significance in our audit of the consolidated financial
statements of the current period. These matters were addressed in the
context of our audit of the consolidated financial statements as a whole,
and in forming our opinion thereon, and we do not provide a separate
55
opinion on these matters. For the matter below, our description of how our
audit addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s
responsibilities for the audit of the consolidated financial statements
section of our report, including in relation to these matters. Accordingly,
our audit included the performance of procedures designed to respond to
our assessment of the risks of material misstatement of the consolidated
financial statements. The results of our audit procedures, including the
procedures performed to address the matter below, provide the basis for
our audit opinion on the accompanying consolidated financial statements.
Key audit matter
Valuation of customer relationships acquired through
business acquisitions
During the year-ended November 30, 2023, the Corporation made
business acquisitions for an aggregate consideration of $23.3 million. As
part of these business acquisitions, the Corporation recognized customer
relationship intangible assets with a combined fair value of $8.8 million.
The purchase price allocation related to these business acquisitions is
disclosed in Note 3 to the consolidated financial statements.
We identified the valuation of the acquisition-date fair value of the cus-
tomer relationship intangible assets acquired in the business acquisitions
as a key audit matter. The fair value of customer relationship intangible
assets acquired is determined in reference to valuation inputs including
estimates related to forecasted cash flows, such as revenue growth and
earnings before interest, taxes, depreciation, and amortization [“EBITDA”]
margins, as well as customer attrition and discount rates. These valuation
inputs utilized in establishing the fair value of customer relationship
intangible assets acquired require significant auditor judgment as well as
the involvement of valuation specialists due to the sensitivity of the fair
value conclusion to these significant assumptions.
How our audit addressed the key audit matter
Our audit procedures performed included, among others, the following:
→ Inspected the share and assets’ purchase agreements to obtain an
understanding of all the transactions and the key terms;
→ Involved our valuation specialists, on a sample basis, to assist in
evaluating the valuation methodology selected by management, as
well as validating the reasonableness of the discount rate used in the
determination of the fair value of the customer relationships acquired;
→ Evaluated the reasonableness of the significant valuation assumptions
included within the forecasted cash flows of the most significant
acquisition of the year, such as revenue growth, and EBITDA margins, as
well as customer attrition, for which we reviewed historical financial data
of the targets, and benchmarked against other acquisitions previously
made by the Corporation;
→ Performed sensitivity analyses on a sample basis, to test the sensitivity
of the fair value conclusions to changes in significant assumptions such
as revenue growth, customer attrition and discount rates;
→ Evaluated the adequacy of the business acquisitions note disclosure
included in Note 3 of the accompanying consolidated financial
statements in relation to this matter.
RichelieuAnnual Report 2023
Consolidated financial statements
Other information
Management is responsible for the other information. The other informa-
tion comprises:
→ Management’s discussion and analysis; and
→ The information, other than the consolidated financial statements
and our auditor’s report thereon, in the Annual Report.
Our opinion on the consolidated financial statements does not cover
the other information and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the consolidated financial statements,
our responsibility is to read the other information, and in doing so,
consider whether the other information is materially inconsistent with the
consolidated financial statements or our knowledge obtained in the audit
or otherwise appears to be materially misstated.
We obtained management’s discussion and analysis prior to the date of
this auditor’s report. If, based on the work we have performed, we
conclude that there is a material misstatement of this other information,
we are required to report that fact in this auditor’s report. We have nothing
to report in this regard.
The Annual Report is expected to be made available to us after the
date of the auditor’s report. If based on the work we will perform on
this other information, we conclude there is a material misstatement of
other information, we are required to report that fact to those charged
with governance.
Responsibilities of management and those charged with
governance for the consolidated financial statements
Management is responsible for the preparation and fair presentation of
the consolidated financial statements in accordance with IFRSs, and for
such internal control as management determines is necessary to enable
the preparation of consolidated financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is
responsible for assessing the Corporation’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless management either
intends to liquidate the Corporation or to cease operations, or has no
realistic alternative but to do so.
Those charged with governance are responsible for overseeing the
Corporation’s financial reporting process.
Auditor’s responsibilities for the audit of the consolidated
financial statements
Our objectives are to obtain reasonable assurance about whether the
consolidated financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in accordance
with Canadian generally accepted auditing standards will always detect a
material misstatement when it exists. Misstatements can arise from fraud
or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of
users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with Canadian generally accepted
auditing standards, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
→ Identify and assess the risks of material misstatement of the consoli-
dated financial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our
opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve
56
collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
→ Obtain an understanding of internal control relevant to the audit in order
to design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of
the Corporation’s internal control.
→ Evaluate the appropriateness of accounting policies used and the
reasonableness of accounting estimates and related disclosures made
by management.
→ Conclude on the appropriateness of management’s use of the going
concern basis of accounting and, based on the audit evidence obtained,
whether a material uncertainty exists related to events or conditions
that may cast significant doubt on the Corporation’s ability to continue
as a going concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditor’s report to the
related disclosures in the consolidated financial statements or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause the Corporation
to cease to continue as a going concern.
→ Evaluate the overall presentation, structure and content of the consoli-
dated financial statements, including the disclosures, and whether the
consolidated financial statements represent the underlying transactions
and events in a manner that achieves fair presentation.
→ Obtain sufficient appropriate audit evidence regarding the financial
information of the entities or business activities within the Corporation
to express an opinion on the consolidated financial statements. We are
responsible for the direction, supervision and performance of the group
audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among
other matters, the planned scope and timing of the audit and significant
audit findings, including any significant deficiencies in internal control that
we identify during our audit.
We also provide those charged with governance with a statement that we
have complied with relevant ethical requirements regarding independ-
ence, and to communicate with them all relationships and other matters
that may reasonably be thought to bear on our independence, and where
applicable, related safeguards.
From the matters communicated with those charged with governance, we
determine those matters that were of most significance in the audit of the
consolidated financial statements of the current period and are therefore
the key audit matters. We describe these matters in our auditor’s report
unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should
not be communicated in our report because the adverse consequences
of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
The engagement partner on the audit resulting in this independent
auditor’s report is Francis Guimond.
(Signed) Enrst & Young LLP
Montreal, Canada
January 18, 2024
1 CPA auditor, CA, public accountancy permit no. A118111
RichelieuAnnual Report 2023 Consolidated financial statements
Consolidated statements of financial position
As at November 30 (in thousands of dollars)
Notes
2023
$
2022
$
ASSETS
Current assets
Cash and cash equivalents
Accounts receivable
Income taxes receivable
Inventories
Prepaid expenses
Non-current assets
Proprety, plant and equipment
Intangible assets
Right-of-use assets
Goodwill
Deferred taxes
LIABILITIES AND EQUITY
Current liabilities
Bank overdraft
Accounts payable and accrued liabilities
Income taxes payable
Current portion of long-term debt
Current portion of lease obligations
Non-current liabilities
Long-term debt
Lease obligations
Deferred taxes
Other liabilities
Equity
Share capital
Contributed surplus
Retained earnings
Accumulated other comprehensive income
Equity attributable to shareholders of the Corporation
Non-controlling interests
46,327
21,220
219,264
222,238
12,621
—
572,351
660,242
8,905
7,071
859,468
910,771
78,053
67,808
54,832
66,603
167,124
116,204
135,089
127,457
7,421
7,998
1,314,963
1,283,865
22,617
133,208
169,785
169,913
4,373
2,940
37,989
10,749
5,208
29,145
237,704
348,223
2,406
143,336
11,169
12,191
859
95,705
10,052
9,204
406,806
464,043
72,289
9,040
61,829
8,400
794,971
719,185
28,593
27,743
904,893
817,157
3,264
2,655
908,157
819,822
1,314,963
1,283,865
4
5
10
5
9
6
8
9
7
10
7
10
9
8
8
12
See accompanying notes to the consolidated financial statements.
57
On behalf of the Board of Directors:
(Signed) Richard Lord
Director
(Signed) Luc Martin
Director
RichelieuAnnual Report 2023 Consolidated financial statements
Consolidated statements of earnings
Years ended November 30 (in thousands of dollars, except earnings per share)
Sales
Notes
2023
$
2022
$
1,787,754
1,802,787
Operating expenses excluding amortization
8, 13
1,557,350
1,515,345
Earnings before amortization, financial costs and income taxes
230,404
287,442
Amortization of property, plant and equipment
and right-of-use assets
Amortization of intangible assets
Net financial costs
Earnings before income taxes
Income taxes
Net earnings
Net earnings attributable to:
Shareholders of the Corporation
Non-controlling interests
Net earnings per share attributable to shareholders of the Corporation
Basic
Diluted
See accompanying notes to the consolidated financial statements.
4, 10
5
9
8
50,070
10,857
13,280
74,207
38,010
10,636
7,144
55,790
156,197
231,652
42,370
61,703
113,827
169,949
111,474
168,390
2,353
1,559
113,827
169,949
2.00
1.98
3.01
2.99
Consolidated statements of comprehensive income
Years ended November 30 (in thousands of dollars)
Net earnings
Other comprehensive income that will be reclassified to net earnings
Notes
2023
$
2022
$
113,827
169,949
Exchange differences on translation of foreign operations
12
850
13,479
Comprehensive income
Comprehensive income attributable to:
Shareholders of the Corporation
Non-controlling interests
See accompanying notes to the consolidated financial statements.
58
114,677
183,428
112,324
181,869
2,353
1,559
114,677
183,428
RichelieuAnnual Report 2023 Consolidated financial statements
Consolidated statements of changes in equity
Years ended November 30 (in thousands of dollars)
Shares repurchased
(361)
—
—
—
—
—
—
—
—
Attributable to shareholders of the Corporation
Share capital
Contributed
surplus
Retained
earnings
$
8
$
8
$
Accumulated
other
comprehensive
income
$
12
Total
Non-
controling
interest
Total
equity
$
$
$
54,610
7,046
590,522
14,264
666,442
2,495
668,937
168,390
—
168,390
1,559
169,949
—
13,479
13,479
—
13,479
168,390
13,479
181,869
1,559
183,428
7,580
(1,296)
2,650
(11,928)
—
—
—
—
—
(29,083)
(16)
1,300
7,219
1,354
(39,727)
—
—
—
—
—
—
—
(12,289)
6,284
2,650
—
—
—
(12,289)
6,284
2,650
(29,083)
(493)
(29,576)
(16)
404
388
1,300
(1,300)
—
(31,154)
(1,389)
(32,543)
61,829
8,400
719,185
27,743
817,157
2,665
819,822
111,474
—
111,474
2,353
113,827
—
850
850
—
850
111,474
850
112,324
2,353
114,677
10,482
(1,930)
2,570
(751)
—
—
—
—
—
(33,521)
—
(1,416)
10,460
640
(35,688)
—
—
—
—
—
—
—
(773)
8,552
2,570
—
—
—
(773)
8,552
2,570
(33,521)
(817)
(34,338)
—
(2,353)
(2,353)
(1,416)
1,416
—
(24,588)
(1,754)
(26,342)
72,289
9,040
794,971
28,593
904,893
3,264
908,157
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Notes
Balance as at
November 30, 2021
Net earnings
Other comprehensive
income
Comprehensive income
Stock options
exercised
Share-based compensation
expense
Dividends [note 17]
Other liabilities
Change in fair value
of other liabilities
Balance as at
November 30, 2022
Net earnings
Other comprehensive
income
Comprehensive income
Stock options
exercised
Share-based compensation
expense
Dividends [note 17]
Other liabilities
Change in fair value
of other liabilities
Balance as at
November 30, 2023
Shares repurchased
(22)
See accompanying notes to the consolidated financial statements.
59
RichelieuAnnual Report 2023 Consolidated financial statements
Consolidated statements of cash flows
Years ended November 30 (in thousands of dollars)
OPERATING ACTIVITIES
Net earnings
Items not affecting cash and cash equivalent
Amortization of property, plant and equipment
and right-of-use assets
Amortization of intangible assets
Deferred taxes
Share-based compensation expense
Net financial costs
Net change in non-cash working capital balances
FINANCING ACTIVITIES
Repayment of long-term debt
Payment of lease obligations
Interest paid on bank overdraft
Dividends paid to shareholders of the Corporation
Other dividends paid
Common shares issued
Common shares repurchased for cancellation
INVESTING ACTIVITIES
Business acquisitions
Notes
2023
$
2022
$
113,827
169,949
50,070
10,857
38,010
10,636
(121)
(594)
2,570
13,280
2,650
7,144
190,483
227,795
80,174
(260,652)
270,657
(32,857)
(5,306)
(5,152)
(34,108)
(25,908)
(6,387)
(3,312)
(33,521)
(29,083)
(817)
8,552
(493)
6,284
(773)
(12,289)
(72,360)
(69,953)
(19,694)
(44,255)
4, 10
5
9
8
10
17
8
8
3
Additions to property, plant and equipment and intangible assets
4, 5
(42,093)
(22,578)
(61,787)
(66,833)
(812)
(1,052)
135,698
(170,695)
(111,988)
58,707
23,710
(111,988)
61,488
72,829
Effect of exchange rate changes on cash and cash equivalents
Net change in cash and cash equivalents (bank overdraft)
Cash and cash equivalents (bank overdraft), beginning of year
Cash and cash equivalents and (bank overdraft), end of year
Supplementary information
Income taxes paid
See accompanying notes to the consolidated financial statements.
60
RichelieuAnnual Report 2023 Notes to consolidated financial statements
Notes to consolidated financial statements
November 30, 2023 and 2022 (Amounts are in thousands of dollars, except per-share amounts or otherwise indicated)
NATURE OF BUSINESS
Accounts Receivable
Accounts receivable are carried at cost, which is equivalent to fair
market value on initial recognition. Subsequent measurements
are recorded at amortized cost using the effective interest
method. For the Corporation, this measurement is usually equiva-
lent to cost due to their short-term maturities. At each period
end, the Corporation estimates the expected credit losses. These
expected losses are adjusted to reflect factors that are specific to
accounts receivable, general economic conditions as well as an
assessment of both current and forecasted economic conditions
prevailing at the reporting date. The evaluation is calculated using
the simplified method. The net change in expected credit losses
on accounts receivable is recognized in net earnings.
Inventories
Inventories, which consist primarily of finished goods, are
valued at the lower of average cost and net realizable value. Net
realizable value is the expected selling price in the normal course
of business, less estimated costs to sell. The Corporation uses
judgment when estimating the effect of certain factors on the net
realizable value of inventory, such as inventory obsolescence and
losses. The quantity, age and condition of inventory are measured
and regularly assessed during the year.
Property, Plant and Equipment
Property, plant and equipment are recorded at cost and amor-
tized on a straight-line basis over their estimated useful lives. The
main components have different useful lives and are amortized
separately. The amortization method and useful life estimates are
reviewed annually.
Buildings
Leasehold improvements
Machinery and equipment
Rolling stock
Furniture and fixtures
Computer hardware
Intangible Assets
20 years
Lease terms
5-10 years
5 years
3-5 years
3-5 years
Intangible assets are acquired assets that lack physical substance
and meet the specified criteria for recognition apart from
property, plant and equipment. Intangible assets consist mainly
of purchased or internally developed software, non-competition
agreements, customer relationships, and trademarks. Software
and customer relationships are amortized on a straight-line
basis over their useful lives of 3 and 20 years, respectively, while
non-competition agreements are amortized over the terms of
the agreements which are currently between 2 and 5 years.
Trademarks have an indefinite useful life and are therefore
not amortized.
Richelieu Hardware Ltd. (the “Corporation”) is incorporated
under the laws of Quebec, Canada. The Corporation is an
importer, manufacturer and a distributor of specialty hardware
and complementary products. Its products target an extensive
customer base of kitchen and bathroom cabinet, storage and
closet, home furnishing and office furniture manufacturers,
residential and commercial woodworkers and hardware retailers
including renovation superstores. The Corporation’s head office
is located at 7900 Henri-Bourassa Blvd. West, Montreal, Quebec,
Canada, H4S 1V4.
1. SIGNIFICANT ACCOUNTING POLICIES
The Corporation’s consolidated financial statements, presented
in Canadian dollars, have been prepared by management in
accordance with International Financial Reporting Standards
(“IFRS”). The Corporation’s accounting policies have been
applied consistently to all fiscal years presented in these
consolidated financial statements.
The preparation of the consolidated financial statements requires
management to make estimates and assumptions that affect
the amounts reported in the consolidated financial statements
and accompanying notes. These estimates are based on
management’s best knowledge of current events and actions that
the Corporation may undertake in the future and other factors
deemed relevant and reasonable.
The judgments made by management in applying the accounting
policies that have the most significant effect on the amounts
recognized in the consolidated financial statements and the
assumptions about the future and other major sources of
estimation uncertainty as at the end of the reporting period that
could potentially result in material adjustments to the carrying
amount of assets and liabilities during the following period
relate to impairment of inventory, including inventory losses and
obsolescence, and require the use of judgment and assumptions
that may affect the amounts reported in the consolidated
financial statements. The underlying estimates and assumptions
are regularly reviewed. Revised accounting estimates, if any, are
recognized in the period in which the estimates are revised, as
well as in future periods affected by the revisions. Actual results
could differ from those estimates.
The Corporation’s consolidated financial statements have been
properly prepared within the reasonable limits of materiality, in
accordance with the accounting policies summarized below:
Consolidation
The consolidated financial statements include the accounts
of Richelieu Hardware Ltd. and its subsidiaries. All significant
intercompany balances and transactions have been eliminated
upon consolidation
Cash and Cash Equivalents
Cash and cash equivalents consist of cash on hand and highly
liquid investments with a term of three months or less. Cash and
cash equivalents are measured at amortized cost.
61
RichelieuAnnual Report 2023 Notes to consolidated financial statements
1. SIGNIFICANT ACCOUNTING POLICIES (cont’d)
Leases
i) Right-of-use assets
Right-of-use assets are recognized at the commencement date
of the lease (i.e., the date the underlying asset is available for use)
and are measured at cost, less any accumulated amortization
and impairment losses, and adjusted for any remeasurement of
the lease obligations. The cost of right-of-use assets includes
the number of lease obligations recognized, initial direct costs
incurred and lease payments made at or before the commence-
ment date less any lease incentives received. Right-of-use assets
are amortized on a straight-line basis over the shorter of the
lease term and the estimated useful lives of the assets, which is
currently between 2 and 15 years.
ii) Lease obligations
At the commencement date of the lease, the lease obligations are
measured at the present value of lease payments to be made over
the lease terms using the Corporation’s incremental borrowing
rate. The lease payments include fixed payments less any lease
incentives receivable, variable lease payments that depend on an
index or a rate, and amounts expected to be paid under residual
value guarantees. The lease payments also include the exercise
price of a purchase option reasonably certain to be exercised
and payments of penalties for terminating the lease, if applicable.
Variable lease payments that do not depend on an index or a rate
are recognized as expenses in the period in which the event or
condition that triggers the payment occurs.
Goodwill
Goodwill represents the excess of the purchase price over the fair
value of net assets acquired and corresponds to the development
potential of the acquired businesses, combined with the
Corporation’s operations and from the expected synergies and
expanding of the product offering and distribution network.
Goodwill is not amortized.
Impairment of Non-Current Assets
At the end of each reporting period, the Corporation determines
whether indicators of impairment exist for its non-current assets,
excluding goodwill and intangible assets with indefinite useful
lives. If such indicators exist, the non-current assets are tested for
impairment. When the impairment test indicates that the carrying
amount of the tangible or intangible asset exceeds its recoverable
amount, an impairment loss is recognized in net earnings in an
amount equal to the excess.
The Corporation is required to test goodwill and intangible
assets with indefinite useful lives for impairment at least once a
year, whether or not indicators of impairment exist. Impairment
tests are carried out on the asset itself, the cash-generating unit
(“CGU”) or group of CGUs as at November 30. A CGU is the
smallest identifiable group of assets that generates cash inflows
that are largely independent of the cash inflows from other
assets or groups of assets. Goodwill and the supporting assets
that cannot be wholly allocated to a single CGU are tested for
impairment at the group of CGUs level. Impairment tests consist
in a comparison between the carrying and recoverable amounts
of an asset, CGU or group of CGUs. The recoverable amount
is the higher of value in use and fair value less costs to sell.
Where the carrying amount exceeds the recoverable amount, an
impairment loss equal to the excess is recognized in net earnings,
however, the carrying amount of the assets is not reduced below
the higher of their fair value less costs to sell and their value in
use. Other than for goodwill, if a reversal of an impairment loss
occurs, it must be recognized immediately in net earnings. On
reversal of an impairment loss, the increased recoverable amount
of an asset must not exceed the carrying amount that would
have been determined, net of amortization, if no impairment
loss had been recognized in respect of the asset in prior years.
As part of goodwill impairment tests, the Corporation generally
uses fair value less costs to sell to estimate the recoverable
amount, which is calculated by multiplying earnings before
depreciation, amortization, financial charges and taxes (“EBITDA”)
of the CGU or group of CGUs by the multiple of the EBITDA from
comparable companies whose activities are similar to those of
the Corporation. As part of the impairment tests on intangible
assets with indefinite useful lives, the Corporation also uses the
fair value less costs to sell in order to estimate the recoverable
amount, which is calculated according to the relief-from-royalty
method. This method involves estimating the fair value of
trademarks by reference to royalty levels payable for the use
of comparable assets.
Financial Liabilities
Bank overdraft, accounts payable, accrued liabilities and
long-term debt are initially recorded at fair value. They are
subsequently measured at amortized cost using the effective
interest method. For the Corporation, this measurement is usually
equivalent to cost.
Other Liabilities
Options to purchase non-controlling interests that correspond to
the definition of a financial liability are measured at fair value and
presented under other liabilities. Gains or losses resulting from
revaluation at the end of each period may be recorded in net
earnings or in retained earnings. The Corporation has chosen to
record them in retained earnings. The Corporation has classified
the measurement of this fair value as level 3, as it is based on data
which is not observable in the market.
Revenue Recognition
Revenues are measured at the fair value of the consideration
received or receivable, net of returns and discounts granted,
and are recognized when control of the goods is transferred to
the customer, which occurs when the Corporation satisfies its
performance obligation, generally upon delivery of the goods
to the customer.
62
RichelieuAnnual Report 2023 Notes to consolidated financial statements
1. SIGNIFICANT ACCOUNTING POLICIES (cont’d)
Share-Based Payment
The Corporation offers a stock option plan to its officers and key
employees. The subscription price of each share issuable under
the plan is equal to the weighted average market price of the
shares for the five (5) business days prior to the day the option
was granted and must be paid in full at the time the option is
exercised. Options vest at a rate of 25% per year starting one year
after grant date and expire on the tenth anniversary of the grant
date. The Corporation recognizes stock-based compensation and
other share-based payments in net earnings using the fair value
method for stock options granted with a corresponding increase
recorded in contributed surplus. The Black & Scholes model is
used to determine the grant date fair value of stock options. The
application of this method is based on different assumptions such
as risk-free interest rate, expected life, volatility and dividend
yield as described in note 8.
Deferred Share Unit Plan
The Corporation offers a deferred share unit (“DSU”) plan
to its directors who can elect to receive part or all of their
compensation in DSUs. The value of DSUs is redeemable
for cash only when a director ceases to be a member of the
Board. The number of DSUs granted to a director equals the
compensation amount to be converted in DSUs divided by the
average closing price of the shares for the five (5) business days
immediately preceding the date of the payment. The DSU liability
is measured at fair value at each closing date on the basis of
the number of outstanding share units and the market price of
the Corporation’s common shares and is included in Accounts
payable and accrued liabilities. The Corporation has entered into
equity swaps to reduce its exposure on net earnings related to
the fluctuations of the Corporation’s share price. The net effect
of the equity swaps mostly offsets the impact of the change in
the Corporation’s share price and is included in the Operating
expenses excluding amortization.
Net Earnings per Share
Net earnings per share are calculated based on the weighted
average number of common shares outstanding during the year.
Diluted earnings per share are calculated using the treasury
stock method and take into account all the elements that have
a dilutive effect.
2. NEW ACCOUNTING POLICIES
In May 2021, the IASB amended IAS 12 “Income Taxes” to narrow
the scope of the recognition exemption so that it does not apply
to transactions that, on initial recognition, give rise to equal
taxable and deductible temporary differences. The amendments
apply to fiscal years beginning on or after January 1, 2023. The
Corporation believes that these amendments will have no impact
on its consolidated financial statements.
Income Taxes
The Corporation follows the liability method of accounting
for income taxes. Under this method, deferred tax assets and
liabilities are accounted for based on estimated taxes recoverable
or payable that would result from the recovery or settlement of
the carrying amount of assets and liabilities. Deferred tax assets
and liabilities are measured at the tax rates that are expected
to apply in the years in which the temporary differences are
expected to reverse. Changes in these balances are recognized
in net earnings in the year in which they arise.
Deferred tax assets are recognized to the extent that it is probable
that the Corporation will have future taxable income against which
these tax assets may be offset. In determining these deferred tax
assets, assumptions are considered, such as the period for tax
loss carrying forwards to be completely used up and the level of
future taxable income in accordance with tax planning strategies.
Foreign Currency Translation
Monetary assets and liabilities of the Corporation are translated
at the exchange rate in effect at the end of the reporting period
and the other items in the statements of financial position and
earnings are translated at the exchange rates in effect at the date
of transaction. Foreign exchange gains and losses are recognized
in net earnings in the year in which they arise.
The assets and liabilities of the U.S. subsidiary are translated
into Canadian dollars at the exchange rate in effect at the end
of the reporting period. Revenues and expenses are translated
at the average monthly exchange rate in effect during the
periods. Foreign exchange gains and losses are recognized in the
consolidated statements of comprehensive income.
Derivative Financial Instruments
The Corporation periodically enters into foreign exchange forward
contracts with financial institutions to partially hedge the effects of
fluctuations in foreign exchange rates related to foreign currency
liabilities, as well as to hedge anticipated purchase transactions.
The Corporation does not use derivatives for speculation or trading
purposes and only enter into these contracts with major financial
institutions. The Corporation enters into equity swaps to reduce
its exposure on net earnings related to the fluctuations in the
Corporation’s share price relating to its deferred share unit plan.
Fair Value Measurements Hierarchy
Fair value measurements of financial asset and liabilities
recognized at fair value in the consolidated statements of
financial position or whose fair value is presented in the notes
to the consolidated financial statements are categorized in
accordance with the following hierarchy:
Level 1:
Level 2:
quoted prices (unadjusted) in active
markets for identical assets or liabilities;
inputs other than quoted prices included
in Level 1 that are observable for the asset
or liability, either directly (i.e., as prices)
or indirectly (i.e., derived from prices);
Level 3:
inputs for the asset or liability that are not based
on observable market data (unobservable inputs).
63
RichelieuAnnual Report 2023 Notes to consolidated financial statements
3. BUSINESS ACQUISITIONS
Summary of Acquisitions
The preliminary purchase price allocations, at the transaction
dates, is summarized as follows:
Current assets acquired
10,956
21,924
2023
$
2022
$
Property, plant and
equipment and right-of-use
assets [note 4, 10]
Intangible assets [note 5]
Goodwill [note 5]
2,974
9,236
7,467
30,633
11,351
19,778
15,013
68,066
Current liabilities assumed
(2,561)
(10,257)
Non-current liabilities
assumed
(2,214)
(8,777)
Deferred tax liabilities
(1,912)
(271)
Non-controlling interests
(625)
—
Net assets acquired
23,321
48,761
Consideration
Cash, net of cash acquired
19,694
44,255
Consideration payable [note 7]
3,627
4,506
23,321
48,761
Goodwill deductible for tax purposes with regard to these
acquisitions amounts to $1.3 million [$13.5 million in 2022].
Preliminary purchase price allocations is subject to fair value
adjustments to assets, liabilities and goodwill until the estimation
process is complete. The final allocation of the purchase price
should be completed as soon as management has gathered
all the information available and deemed necessary to finalize
the calculation, in particular for intangible assets, no later than
12 months after the acquisition date.
2023
Effective January 1, 2023, the Corporation acquired, through a
newly formed subsidiary, 100% of all issued and outstanding
shares of both Usimm Inc. and Unigrav Inc., two 3D scanning
providers offering custom-made products for the architectural
and industrial market, in partial consideration for which a
participation equivalent to 25% of the share capital of said newly
formed subsidiary was issued in the name of the sellers. The
offices of Usimm and Unigrav are respectively located in Montreal
and Drummondville, QC.
Effective January 4, 2023, the Corporation acquired all issued
and outstanding shares of Quincaillerie Rabel Inc., a specialty
hardware distributor operating one distribution centre in
Terrebonne, QC.
Effective January 6, 2023, the Corporation acquired all issued and
outstanding shares of Trans-World Distributing Ltd., a distributor
of industrial fasteners for the industrial market operating one
distribution centre in Dartmouth, NS.
Effective April 3, 2023, the Corporation acquired the main
net assets of Maverick Hardware, a distributor of specialized
hardware operating one distribution centre in Eugene, OR.
Effective April 30, 2023, the Corporation acquired the main
net assets of Westlund Distributing, a distributor of specialized
hardware operating one distribution centre in Monticello, MN.
Sales of $23.5 million have been generated by these acquisitions
since their completion. Had these acquisitions been made on
December 1, 2022, management believes that sales included
in the consolidated statement of earnings would have totalled
approximately $27.0 million.
2022
Effective September 2, 2022, the Corporation closed a transaction
pertaining to the acquisition of all issued and outstanding shares
of Quincaillerie Deno, a distributor of specialized hardware
products operating one distribution centre located in Anjou, QC.
Effective December 31, 2021, the Corporation acquired the main
net assets of Compi Distributors, a distributor of specialized
hardware operating four distribution centres in St. Louis, MO,
Kansas City, MO, Ozark, MO and Springfield, IL.
Effective December 31, 2021, the Corporation acquired the main
net assets of HGH Hardware Supply, a distributor of specialized
hardware operating four distribution centres, one in Birmingham,
AL, one in Nashville, TN and two in Atlanta, GA.
Effective December 31, 2021, the Corporation acquired the main
net assets of National Builders Hardware, a distributor of special-
ized hardware operating one distribution centre in Portland, OR.
64
RichelieuAnnual Report 2023 Notes to consolidated financial statements
4. PROPERTY, PLANT AND EQUIPMENT
Land
$
Buildings
$
Leasehold
improve-
ments
$
Machinery
and
equipment
$
Rolling
stock
$
Furniture
and fixtures
$
Computer
equipment
$
Total
$
3,760
31,378
9,476
54,949
22,706
17,970
20,021
160,260
—
(23,522)
(7,129)
(36,266)
(15,535)
(16,141)
(15,428)
(114,021)
3,760
7,856
2,347
18,683
7,171
1,829
4,593
46,239
(79)
208
2,400
8,015
6,060
1,283
2,888
20,775
—
—
—
—
56
182
279
36
12
565
(1,044)
(981)
(5,110)
(3,293)
(929)
(2,261)
(13,618)
—
123
393
278
52
25
871
3,681
7,020
3,945
22,163
10,495
2,271
5,257
54,832
3,681
31,296
12,227
63,906
29,156
19,671
23,023
182,960
—
(24,276)
(8,282)
(41,743)
(18,661)
(17,400)
(17,766) (128,128)
3,681
7,020
3,945
22,163
10,495
2,271
5,257
54,832
2,980
6,637
6,886
10,975
8,495
2,574
859
39,406
—
—
—
—
—
889
109
7
11
1,016
(984)
(1,910)
(6,468)
(4,229)
(1,190)
(2,574)
(17,355)
—
55
49
36
9
5
154
6,661
12,673
8,976
27,608
14,906
3,671
3,558
78,053
6,661
37,897
18,765
71,622
34,704
18,976
17,735
206,360
—
(25,224)
(9,789)
(44,014)
(19,798)
(15,305)
(14,177) (128,307)
6,661
12,673
8,976
27,608
14,906
3,671
3,558
78,053
Cost
Accumulated
amortization
Net carrying amount as
at November 30, 2021
Acquisitions
(dispositions)
Business acquisitions
[note 3]
Amortization
Effect of changes in
foreign exchange rates
Net carrying amount as
at November 30, 2022
Cost
Accumulated
amortization
Net carrying amount as
at November 30, 2022
Acquisitions
(dispositions)
Business acquisitions
[note 3]
Amortization
Effect of changes in
foreign exchange rates
Net carrying amount as
at November 30, 2023
Cost
Accumulated
amortization
Net carrying amount as
at November 30, 2023
65
RichelieuAnnual Report 2023 Notes to consolidated financial statements
5. INTANGIBLE ASSETS AND GOODWILL
Non-
competition
agreements
$
Customer
relationships
$
Software
$
Trademarks
$
Total
$
Goodwill
$
Cost
12,186
7,002
81,424
7,045
107,657
110,776
Accumulated amortization
(9,482)
(5,768)
(38,497)
—
(53,747)
—
Net carrying amount as at
November 30, 2021
Acquisitions
Business acquisitions [note 3]
2,704
1,803
—
1,234
42,927
7,045
53,910
110,776
—
833
—
18,945
—
—
—
1,803
—
19,778
15,013
(10,636)
—
Amortization
(894)
(676)
(9,066)
Effect of changes in foreign exchange rates
4
34
1,570
140
1,748
1,668
Net carrying amount as at
November 30, 2022
Cost
3,617
1,425
54,376
7,185
66,603
127,457
13,997
8,040
103,230
7,185
132,452
127,457
Accumulated amortization
(10,380)
(6,615)
(48,854)
—
(65,849)
—
Net carrying amount as at
November 30, 2022
Acquisitions
Business acquisitions [note 3]
3,617
2,687
5
—
403
—
8,828
Amortization
(1,047)
(788)
(9,022)
Effect of changes in foreign exchange rates
—
—
124
—
—
—
15
2,687
9,236
(10,857)
139
—
7,467
—
165
1,425
54,376
7,185
66,603
127,457
Net carrying amount as at
November 30, 2023
Cost
5,262
1,040
54,306
7,200
67,808
135,089
15,420
8,464
112,343
7,200
143,427
135,089
Accumulated amortization
(10,158)
(7,424)
(58,037)
—
(75,619)
—
Net carrying amount as at
November 30, 2023
5,262
1,040
54,306
7,200
67,808
135,089
For impairment test purposes, the carrying amounts of goodwill
and intangible assets have been allocated to CGUs or groups of
CGUs. The carrying amounts of goodwill for the two groups of
CGUs that are significant in comparison with the total carrying
amount of goodwill are $101.5 million and $31 million, while the
$2.6 million balance is allocated to another CGU. The carrying
amounts of intangible assets with indefinite useful lives are
allocated across multiple CGUs or groups of CGUs that are not
individually significant in comparison with the total carrying
amount of intangible assets with indefinite useful lives.
6. BANK OVERDRAFT
As at November 30, 2023 and 2022, the Corporation had lines
of credit with authorized amounts of C$150 million and US$56
million, bearing interest at the bank’s prime and Bloomberg
Short Term Bank Yield Index (“BSBY”) rate plus 1.05%, which
were respectively 7.20% and 6.43% as at November 30, 2023
[5.95% and 5% as at November 30, 2022]. These lines of credit
are renewable annually. As at November 30, 2023, an amount
of $23 million, including US$17 million, was drawn on these lines
of credit [as at November 30, 2022 — $133 million, including
US$36 million, was drawn].
7. LONG-TERM DEBT
Non-interest bearing business
acquisition considerations
payable, including US$289
Current portion of long-term debt
Long-term debt
2023
$
2022
$
5,346
2,940
2,406
6,067
5,208
859
66
RichelieuAnnual Report 2023 Notes to consolidated financial statements
7. LONG-TERM DEBT (cont’d)
Stock Option Plan
Principal repayments are as follows:
Changes in stock options are summarized as follows:
2023
$
2,940
1,452
802
152
2022
$
5,208
430
429
—
5,346
6,067
Less than 1 year
1-2 years
2-3 years
More than 3 years
8. SHARE CAPITAL
Authorized
Unlimited number of:
→ Common shares, participating, entitling the holder to one vote
per share.
→ Non-voting first and second ranking preferred shares issuable
in the series, the characteristics of which are to be determined
by the Board of Directors.
Changes in common shares are summarized as follows:
Number
of shares
(in thousands)
$
Outstanding, November 30, 2021
55,842
54,610
Issued
Repurchased
271
7,580
(327)
(361)
Outstanding, November 30, 2022
55,786
61,829
Issued
Repurchased
324
10,482
(20)
(22)
Outstanding, November 30, 2023
56,090
72,289
During fiscal 2023, the Corporation issued 323,575 common
shares [271,000 in 2022] at a weighted average exercise price of
$26.43 per share [$23.19 in 2022] pursuant to the exercise of stock
options under the stock option plan. The weighted average share
price on the market at the date of exercise was $41.09 [$47.96 in
2022]. In addition, during fiscal 2023, the Corporation, through a
normal course issuer bid, repurchased 20,000 common shares
for cancellation in consideration for $773 [327,329 common
shares for a consideration of $12,289 in 2022], which resulted in a
premium on the redemption in the amount of $751 recognized as
a reduction of retained earnings [premium of $11,928 in 2022].
67
Number
of options
(in thousands)
Weighted
average
exercise
price
$
Outstanding, November 30, 2021
1,691
27.14
Granted
Exercised
Cancelled
276
43.57
(271)
23.19
(16)
34.03
Outstanding, November 30, 2022
1,680
30.50
Granted
Exercised
Cancelled
307
37.39
(324)
26.43
(41)
37.63
Outstanding, November 30, 2023
1,622
32.44
The table below summarizes information regarding the stock
options outstanding as at November 30, 2023:
Options
outstanding
Exercisable
options
Weighted
average
remaining
period
(in years)
Weighted
average
exercise
price
(in dollars)
Number
of options
(in thousands)
Weighted
average
exercise
price
(in dollars)
0.15
14.50
11
14.50
1.93
21.05
5.07
26.80
7.56
37.68
169
444
335
959
21.05
26.60
35.57
28.61
1,622
6.15
32.44
Range in
exercise prices
(in dollars)
Number
of options
(in thousands)
12.71-17.25
17.26-23.50
23.51-32.00
32.01-43.57
12
170
499
941
During fiscal 2023, the Corporation granted 306,500 stock
options [276,000 in 2022] with an average exercise price of $37.39
per share [$43.57 in 2022] and an average fair value of $9.18 per
option [$12.37 in 2022] as determined using the Black & Scholes
option pricing model using an expected dividend yield of 1.4%
[1.2% in 2022], an expected volatility of 24.3% [23.1% in 2022], a
risk-free interest rate of 2.75% [1.84% in 2022] and an expected
life of 6.46 years [6.23 years in 2022] and 41,000 options were
cancelled [17,125 in 2022]. For the year ended November 30,
2023, compensation expense related to stock options amounted
to $2,570 [$2,650 in 2022] and is recognized under Operating
expenses excluding amortization.
Deferred Share Unit Plan
The financial liability resulting from the DSU plan of $7,500
[$8,940 as at November 30, 2022] is presented under Accounts
payable and accrued liabilities. As at November 30, 2023, the
fair value of the equity swaps amounted to an asset of $178 and
is presented under Accounts receivable [an asset of $618 as at
November 30, 2022 and presented under Accounts receivable].
The Corporation classified the fair value measurement in Level 2,
as it is derived from observable market data.
RichelieuAnnual Report 2023 Notes to consolidated financial statements
8. SHARE CAPITAL (cont’d)
The compensation expense for the DSUs for the year ended
November 30, 2023 amounted to $988 [$861 in 2022] and is
recognized under Operating expenses excluding amortization.
The effective income tax rate differs from the combined statutory
rates for the following reasons:
2023
$
2022
$
Number of DSUs
2023
2022
Combined statutory rates
26.62%
26.62%
Outstanding, beginning of year
229,179
211,409
Paid
Granted
(77,675)
—
22,909
17,770
Outstanding, end of year
174,413
229,179
Share Purchase Plan
Compensation expense related to the share purchase plan
amounted to $1,289 for the year ended November 30, 2023
[$1,064 in 2022] and is recognized under Operating expenses
excluding amortization.
Net Earnings per Share
Income taxes at combined
statutory rates
Increase (decrease) resulting from:
Impact of statutory rates
differences for the subsidiaries
Share-based compensation
Non-deductible expenses and other
Changes related to tax
laws and tax rates
41,580
61,666
(289)
(434)
524
565
554
(82)
(10)
(1)
42,370
61,703
Basic and diluted net earnings per share were calculated based
on the following number of shares:
(in thousands)
2023
2022
Deferred taxes reflect the net tax impact of temporary differences
between the value of assets and liabilities for accounting and
tax purposes. The major components of deferred tax assets and
liabilities of the Corporation were as follows:
Weighted average number of
shares outstanding - Basic
Dilutive effect under
stock option plan
Weighted average number of
shares outstanding - Diluted
55,870
55,925
346
420
56,216
56,345
The computation of diluted net earnings per share did not take
into account the weighted average of 256,750 stock options
[271,000 in 2022] since their exercise price, being higher than
the average price of the shares for the period, would have had
an anti-dilutive effect.
9. INCOME TAXES
2023
$
2022
$
Reserves for tax purposes
deductible only upon disbursement
and other tax attributes
15,185
14,520
Excess of the net carrying
value of property, plant and
equipment over their tax value
Excess of the net carrying
value of intangible assets and
goodwill over their tax value
Right-of-use assets and
lease obligations
(8,811)
(5,558)
(13,924)
(13,332)
3,802
2,316
(3,748)
(2,054)
The main components of the income tax expense were as follows:
Net amount
Current
Deferred
2023
$
2022
$
42,491
62,297
Related to temporary differences
(111)
(593)
Deferred tax related to
changes in tax rates
(10)
(1)
42,370
61,703
The net deferred taxes included the following as at November 30:
2023
$
2022
$
Deferred tax assets
7,421
7,998
Deferred tax liabilities
(11,169)
(10,052)
(3,748)
(2,054)
68
RichelieuAnnual Report 2023 Notes to consolidated financial statements
9. INCOME TAXES (cont’d)
Lease Obligations
Changes in deferred taxes for the years ended November 30 are
detailed as follows:
The following table presents changes in lease obligations during
fiscal 2023:
Balance at the beginning
of the year, net
(2,054)
(2,805)
Carrying amount
as at November 30, 2022
2023
$
2022
$
2023
$
2022
$
124,850
93,054
In net earnings
121
594
Acquisitions and dispositions
80,972
39,196
Business acquisitions [note 3]
(1,912)
(271)
Financial costs
6,893
3,832
Other
97
428
Business acquisitions [note 3]
1,958
10,786
Balance at the end of the year, net
(3,748)
(2,054)
Payment of lease obligations
(34,108)
(25,908)
As at November 30, 2023, the Corporation had $101,402 of
taxable temporary differences related to investments in subsidi-
aries [$87,545 in 2022]. Deferred tax liabilities were not recog-
nized in respect of such taxable temporary differences as the
Corporation controls the decisions affecting the realization of
such liabilities and does not expect these temporary differences
to reverse in the foreseeable future. However, if the earnings are
distributed in the form of dividends or otherwise, the Corporation
may be subject to corporate income tax or withholding tax in
Canada and/or abroad.
10. RIGHT-OF-USE ASSETS AND LEASE OBLIGATIONS
Right-of-use Assets
The main right-of-use assets held under the Corporation’s leases
are warehouse and office premises.
The following table presents changes in right-of-use assets during
fiscal 2023:
Carrying amount as at
November 30, 2022
2023
$
2022
$
116,204
87,013
Acquisitions and dispositions
80,972
39,196
Business acquisitions [note 3]
1,958
10,786
Effect of exchange rate changes
760
3,890
Carrying amount
as at November 30, 2023
181,325
124,850
11. COMMITMENTS AND CONTINGENCIES
Commitments
Contractual undiscounted payments under leases defined in note
10 are as follows:
As at November 30, 2023
Less than one year
Between 1 and 5 years
More than 5 years
$
37,563
109,143
63,284
209,990
Claims
In the normal course of business, various proceedings and claims
are instituted against the Corporation. Management believes that
any forthcoming settlement in respect of these claims will not
have a material effect on the Corporation’s financial position or
consolidated net earnings.
12. ACCUMULATED OTHER COMPREHENSIVE INCOME
Amortization
(32,715)
(24,392)
Effect of exchange rate changes
705
3,601
The accumulated other comprehensive income, including the
following items and their variances, were as follows:
Carrying amount as at
November 30, 2023
167,124
116,204
2023
$
2022
$
Balance, beginning of year
27,743
14,264
Exchange differences on
translation of foreign operations
850
13,479
Balance, end of year
28,593
27,743
69
RichelieuAnnual Report 2023 Notes to consolidated financial statements
13. FINANCIAL INSTRUMENTS AND OTHER INFORMATION
Fair Value
The carrying value of long-term debt approximates its fair value
because of the short maturity on balance of sale payable. The
Corporation classified the fair value measurement in Level 2,
as it is derived from observable market data.
As at November 30, 2023, the Corporation did not hold any
foreign exchange forward contracts [fair value of $193 as at
November 30, 2022].
Credit Risk
The Corporation sells its products to numerous customers in
Canada and in the United States. Credit risk refers to the possi-
bility that customers will be unable to assume their liabilities
towards the Corporation. The average days outstanding of
accounts receivable, as at November 30, 2023 and 2022, is deemed
acceptable given the industry in which the Corporation operates.
The Corporation performs ongoing credit evaluation of customers
and generally does not require collateral. The allowance for
doubtful accounts for the years ended November 30 is as follows:
Balance, beginning of year
Allowance for doubtful accounts
2023
$
7,449
2,130
2022
$
6,171
1,897
Write-offs
(3,236)
(1,084)
As part of its business practices, the Corporation aims to preserve
the purchase costs and the selling prices of its commercial
activities. To protect its operations from exposure to exchange
rate risks, the Corporation uses, among other things, a centralized
cash flow management. The Corporation may also periodically
use forward foreign exchange contracts. By implementing these
measures, the Corporation seeks to protect operating results
from exposure to exchange rate fluctuations. The Corporation’s
business practices in terms of foreign exchange risk management
does not allow speculative trades.
As at November 30, 2023, a decrease (increase) of 5% of the
Canadian dollar against the US dollar and the euro on translation
of monetary assets and liabilities, all other variables remaining
the same, would have increased (decreased) consolidated net
earnings by $592 [$2,487 as at November 30, 2022] and would
have increased (decreased) other comprehensive income
by $11,451 [$9,661 as at November 30, 2022]. The exchange
rate sensitivity is calculated by aggregation of the net foreign
exchange rate exposure of the Corporation’s financial instru-
ments as at November 30, 2023.
Liquidity Risk
The Corporation manages its risk of not being able to settle its
financial liabilities when required by taking into account its oper-
ational needs and by using different financing tools, as required.
In recent years, the Corporation has financed its growth, business
acquisitions, share repurchases and payout to shareholders using
mainly the cash generated by the operating activities and through
its lines of credit when necessary.
Exchange rate variations and other
406
465
Interest Rate Risk
Balance, end of year
6,749
7,449
The aging of the accounts receivable is as follows:
The Corporation is exposed to interest rate risk associated with
the use of its credit lines.
Operating Expenses Excluding Amortization
2023
$
2022
$
2023
$
2022
$
Current
156,850
157,785
Past due 1-30 days
43,312
45,370
Inventories from the distribution,
imports and manufacturing
activities recognized as an expense
1,309,917 1,295,533
Past due more than 30 days
25,851
26,532
Salaries and related charges
232,581
213,897
Allowance for doubtful accounts
(6,749)
(7,449)
Other charges
219,264
222,238
14,852
5,915
1,557,350 1,515,345
An expense of $4,714 [$10,106 in 2022] for inventory obsoles-
cence was included in Inventories from the distribution, imports
and manufacturing activities.
The balance of accounts receivable of the Corporation that are
overdue for more than 60 days, but have not been provisioned,
totaled $8,476 [$5,722 in 2022]. As at November 30, 2023 and
2022, no customer accounted for more than 10% of the total
accounts receivable.
Market Risk
The Corporation’s foreign currency exposure arises from
purchases and sales transacted mainly in US dollars and euros.
Operating expenses include, for the year ended November 30,
2023, an exchange gain of $1,724 [gain of $7,437 in 2022].
70
RichelieuAnnual Report 2023 Notes to consolidated financial statements
14. RELATED PARTY INFORMATION
16. CAPITAL MANAGEMENT
Scope of Consolidation
The Corporation’s objectives are:
→ Maintain a low debt ratio to preserve its capacity to pursue its
growth both internally and through acquisitions; and
→ Provide an adequate shareholders’ return.
The Corporation manages and makes adjustments to its capital
structure in light of changes in economic conditions and the
risk characteristics of underlying assets. To maintain or adjust
its capital structure, the Corporation may adjust the amount of
dividends paid to shareholders, return capital to shareholders
or issue new shares. As at November 30, 2023, the Corporation
achieved the following results regarding its capital management
objectives:
→ Debt/equity ratio: 0.6% [0.7% as at November 30, 2022]
[long-term debt/equity]
→ Return on average shareholders’ equity of 12.9% over the last
12 months [22.7% for the year ended November 30, 2022]
The Corporation’s capital management objectives remained
unchanged from the previous fiscal year.
17. DIVIDENDS PAID TO SHAREHOLDERS OF THE CORPORATION
For the year ended November 30, 2023, the Corporation paid
four quarterly dividends of $0.15 per common share [four
quarterly dividends of $0.13 per common share in 2022] for a total
amount of $33,521 [$29,083 in 2022]. On January 18, 2024, the
Board of Directors approved the payment of a quarterly dividend
of $0.15 per common share for the first quarter of 2024.
18. APPROVAL OF FINANCIAL STATEMENTS
The consolidated financial statements for the year ended
November 30, 2023 (including comparative figures) were
approved for issue by the Board of Directors on January 18, 2024.
19. SUBSEQUENT EVENTS
Effective December 1, 2023, the Corporation acquired all issued
and outstanding share capital of Olympic Forest Products Inc., a
distributor of specialized lumber and panel products operating
one distribution centre in Erin, ON.
Effective January 1, 2024, the Corporation acquired from minority
shareholders an additional 15% interest in the voting shares of
Provincial Woodproducts Ltd, thereby increasing its interest
to 100%.
Effective January 15, 2024, the Corporation acquired the principal
net assets of Rapid Start, a distributor of specialized hardware
operating one distribution centre in Rittman, OH.
20. COMPARATIVE FIGURES
Some figures disclosed for the year ended November 30, 2022,
have been reclassified to conform to the presentation adopted
for the year ended November 30, 2023.
The following table lists the significant subsidiaries of the group
individually and collectively as at November 30, 2023.
Names
Richelieu
America Ltd.
Richelieu
Finances Ltée (1)
Les Industries
Cedan Inc.
Distributions
20/20 Inc.
Provincial
Woodproducts Ltd.
Menuiserie des
Pins Ltée
Interco division
10 Inc.
Country of
incorporation
United
States
Equity
interest
%
100
Canada
100
Canada
100
Canada
100
Canada
Canada
Canada
85
85
75
Voting
rights
%
100
100
100
100
85
85
75
1. Richelieu Finances Ltée is the owner of 100% of Richelieu
Hardware Canada Ltd.
Key Management Personnel Compensation
2023
$
2022
$
Short-term employee benefits
4,661
4,720
Other long-term benefits
Share-based compensation
689
661
742
678
6,011
6,140
Accounts payable and accrued liabilities include a retirement
allowance amounting to $4,800 [$4,400 as at November 30,
2022] payable to one member of the key management personnel.
15. GEOGRAPHIC INFORMATION
During the year ended November 30, 2023, nearly 59% of sales
had been made in Canada [60% in 2022]. The Corporation’s sales
to foreign countries, almost entirely directed to the United States,
amounted to C$739,695 [C$728,113 in 2022] and US$547,488
[US$562,468 in 2022].
As at November 30, 2023, out of the total amount in property,
plant and equipment, $29,707 [$19,635 in 2022] was located in the
United States. In addition, as at November 30, 2023, intangible
assets and goodwill located in the United States amounted to
C$27,330 and C$31,605, respectively [respectively C$30,037 and
C$30,190 in 2022], and US$20,122 and US$23,270, respectively
[respectively US$22,236 and US$22,350 in 2022]. Of the total
amount of right-of-use assets, $108,477 [November 30, 2022 -
$74,495] was located in the United States.
71
RichelieuAnnual Report 2023 Transfer agent and registrar
Computershare Trust Company of Canada
Auditors
Ernst & Young LLP
900 De Maisonneuve Blvd. West
Suite 2300
Montreal, Quebec H3A 0A8
Head office
Richelieu Hardware Ltd.
7900 Henri-Bourassa Blvd. West
Montreal, Quebec H4S 1V4
Telephone: 514 336-4144
Fax: 514 832-4002
richelieu.com
logo FSC
Since the environment is a priority for Richelieu, this
annual report is printed on Rolland Enviro Satin paper
containing 100% post-consumer recycled fiber,
saving 13 trees, 4 m3 of water and 859 kg CO₂.
Printed in Canada
72
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